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< Back to Latest News Studies Newsletter: R&D Tax Credits Update (Issue 6)

Talking Tax: June 2022

Author: Adam Spriggs, R&D Tax Director

Zeal are currently aiding another company through an enquiry with a technical call scheduled for the end of June to agree that R&D has taken place. Often during enquiries, understanding of technical points that a company has undertaken or overcoming a preconception of an inspectors interpretation can be difficult over letters, and this process often drags on with time between responses.

Our process is to always request a call as early as possible. This call is the fourth that has been led by our team this year, with all of the prior three having 100% of the R&D agreed and approved following the call. This has been a great achievement as in some instances, HMRC asserted that no R&D had taken place before the call. Some of these companies had their claims prepared by Zeal, whilst others had been prepared elsewhere but the previous advisors either abandoned or didn’t feel equipped to handle the enquiry.

Industry Update

Over the past month, HMRC have increased their targeted processing times for Tax Credit claims from 28 to 40 days as they investigated an increase in irregular claims. The industry, over the past week, has seen the result of this investigation with a number of SMEs receiving enquiry notices. Early indication is that the focus is on software claims for under £50,000 of benefit; a threshold that HMRC statistics over the past few years has shown represents 72-74% of all claims submitted.

HMRC have also announced their meeting with advisors will take place next month, where we hope for further clarification on what form the pre-approval process announced in the Spring Statement will take when implemented next April, as well as any further commentary on the ongoing discussions and case decisions