HMRC have published research into how businesses understand Research & Development (R&D) tax relief and their experiences when making a claim.

 A sample of 39 businesses was taken during the research, which aimed to establish the following:

  • What and who makes decisions and is responsible for the claim?
  • How do businesses find out about the reliefs?
  • Guidance and support received, used and needed.
  • Use and influence of agents.
  • What compliance attitudes and behaviours do companies demonstrate in making a claim?

The report was split into three elements: 'Views and attitudes towards R&D', 'The R&D claimant journey' and 'Implications for HMRC'.

Views and attitudes towards R&D

  • Businesses were generally positive about R&D Tax Relief and the support available for innovation.
  • The relief was also considered more complex than many of the other processes a business goes through.
  • The key criteria for the relief; the needing to overcome uncertainty and the requirement of an advance in science or technology is well understood but, what expenditure can then be claimed against, is not.
  • R&D reliefs are seen as good for promoting the UK as a place for innovation.

The R&D claimant journey

  • Most claimants heard about R&D relief from accountants or other businesses, not from HMRC.
  • Experienced claimants had got used to making the claims and built it into their existing processes.
  • Smaller businesses with less financial resources or experience of claiming tended to be the ones using specialist agents or accountants to make the claims on their behalf.
  • Most would claim again either due to previous success or ongoing projects. Those that had not received the full amount claimed were more hesitant to do so.

Implications for HMRC

  • It was felt that HMRC needed to increase awareness of the relief, either whilst engaging on other tax issues or by increasing awareness of the relevant guidance available.
  • Claimants felt the process needed to be made simpler.
  • HMRC support during the claiming process would be welcomed. The level and type of support suggested varied depending on the experience of the claimant.

Useful guides on this topic

 R&D Tax Relief: Overview
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?

R&D: SME Tax Credit Scheme
What Research & Development (R&D) schemes are available for small and medium-sized companies undertaking R&D? How to make an R&D claim? What are the qualifying costs and how much can be claimed?

R&D: 'Large Company' Scheme (RDEC) Guide
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?

External link

Research & analysis: Customer experience in claiming Research & Development tax reliefs


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