With a 20% surge in R&D claims - companies need to make sure they get claim documentation right the first time
October 10, 2019
The latest R&D claim statistics from HMRC are a timely reminder that businesses, and their advisors, need to be on top of their approach to compiling R&D claims.
The statistics reveal that the number of R&D claims has increased 20% year on year and the number of claims for 2016/17 tops 52,000. This compares to less than 20,000 claims in 2013/14 - so in 3 years the number of claims has increased 170%. The number of claims submitted so far for 2017/18 is almost 49,000 and this number will rise with companies still in time to submit their claims for periods ended December 2017.
As shown by these statistics, the relief (worth up to 33p in the £ for certain businesses) has seen a surge in popularity in the past few years, given it is seen as an exceptionally attractive option for a wide spectrum of business seeking to innovate and grow.
But this increase in claims has taken its toll on HMRC’s processing times. And it is unsurprising therefore, that these figures are published against a background of HMRC only recently returning to its stated targets in turnaround times for processing certain R&D claims.
Therefore it is essential that companies follow a robust approach when compiling claims and are mindful of HMRC's increasing expectations on what information should be filed to support R&D claims. To reduce delays and secure R&D credits in a timely and predictable manner, we recommend companies consider the following when submitting claims:
- HMRC’s additional guidance on software claims including updated examples of qualifying projects;
- HMRC’s new online form submission service which is not currently mandatory but potentially hinting about future submission formats preferred by HMRC;
- That technical project summaries provided represent over 50% of qualifying costs (per HMRC’s latest guidance); and
- Introduction of a new PAYE and NIC cap on cashback SME claims from April 2020.
In summary, companies need to ensure their claims are fully robust and comply with recent developments to avoid delays in their claims being processed or a potential HMRC enquiry. If you’d like to speak to a PwC specialist on the topic about how to optimise and safeguard your future claims please contact us at [email protected], [email protected] or [email protected]