R&D tax rebate delays preventing innovation among UK firms

MD Scott Henderson MD is calling for action from the UK government. Picture: contributed

The Edinburgh-based company said a backlog of claims, along with the resulting delay in tax rebate payments, is creating a barrier to growth.

Small and medium-sized enterprises (SMEs) now face a wait of more than 90 days, while larger companies claiming research and development expenditure credit (RDEC) are having to wait at least seven months, said Jumpstart.

It cited HMRC saying it achieves its expected turnaround time of 28 days for SME R&D tax credit claims in 95 per cent of cases.

Jumpstart MD Scott Henderson said it was “essential” for the UK government to act, adding: “We have heard from our own clients as well as other companies that the unprecedented delay in HMRC’s processing of R&D tax relief claims is beginning to impact on investment and growth plans.

“While we’ve not seen any businesses facing closure because of this issue, the R&D tax relief payment is an important source of revenue for many, required to help fund continued research programmes, contribute to further investment in the business or simply pay the bills.”

It comes after Jumpstart was last year bought by France’s Lyon-headquartered ABGI Group.

An HMRC spokesperson said:

“HMRC reviews tens of thousands of claims for R&D tax relief each year. Claims for relief are carefully scrutinised irrespective of the size or structure of an applicant.

“We are sorry that some businesses have not received payments as quickly as we would like and staff have been recruited to help with processing.”