HMRC figures out today show the number of claims for research and development (R&D) tax credits fell 21% in the 2022/23 tax year to 65,690, down from 83,240 in the 2021/22 tax year.
Nikhil Oza says: “HMRC has become incredibly stringent in its processing of R&D tax credit claims in recent years. This is clearly putting many small businesses off applying for tax relief they are entitled to.”
“HMRC has substantially increased the barriers to entry. They now require an additional information form which can be very time-consuming for businesses to process.”
“Whilst HMRC does need to weed out fraudulent R&D claims – it needs to do that in a way that doesn’t cause huge disruption for legitimate businesses that want to invest in R&D in order to grow and create jobs.”
“If businesses are claiming R&D tax relief for the first time they must now give HMRC advanced notification. In many cases businesses are now missing out on tax relief they would easily secured just a few years ago.”
“Most shocking is the large number of cases where HMRC rejects genuine claims outright – depriving growth businesses of vital assistance. There’s a real risk that HMRC’s actions are stifling innovation.”
“If the Government wants UK businesses to continue innovating and driving growth in the economy they need to ensure tax relief schemes for R&D are processed quickly and efficiently.”
“The UK is far behind its competitors in terms of R&D spend. We need to be careful of imposing so much red tape that it puts off genuine applicants.”
