The Research & Development (R&D) tax credit scheme for small and medium-sized enterprise companies is particularly generous as there is currently 230% relief for qualifying expenditure. Where the company is making a loss, this results in a 14.5% repayable credit. This means that the company receives a £33,350 refund for every £100,000 spent on R&D.

It has been reported that this generous tax break has led to an abuse of the system. Recent increases in irregular claims led HMRC to pause some repayments pending investigation.

Unfortunately, even for legitimate claims, this is going to increase processing times.

For the vast majority of claims, HMRC aims to either pay the payable tax credit or contact the claimant regarding the claim within 40 days instead of the previous 28-day response.