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randd, a leading R&D tax credit consultancy, has voiced its concern over the increasing delays and lengthy enquiries into R&D tax claims by HM Revenue & Customs (Revenue).
Recent feedback from the Federation of Small Businesses (FSB) and the Startup Coalition published by the BBC underscores this growing issue, with many innovative small firms facing challenges due to Revenue’s handling of R&D tax claims.
These delays are causing significant stress and uncertainty for accountants and their small business clients, many of whom rely on these tax incentives to fund growth and innovation.
The FSB’s policy chair Tina McKenzie has gone as far as to say that Revenue’s handling of claims “undermines the innovative small firms who are needed if we are to grow our economy.”
The delays from Revenue come after the National Audit Office highlighted the need for more stringent compliance work on older R&D scheme claims after an estimated loss of more than £1bn due to error and fraud during the 2020-21 pandemic peak.
This has led to increased scrutiny of new and existing claims, as well as the introduction of new procedures such as the Additional Information Form (AIF), that have further complicated the process for accountants and delayed claims for their clients.
Ryan Sian, Managing Director of randd, said that he welcome Revenue’s greater scrutiny of tax claims, but feels that Revenue gone about it the wrong way with this new approach.
He said: “The current situation with R&D tax claims is the result of the number of inaccurate and sometimes spurious claims that have been submitted in the past, so it is good to see action being taken.
“However, these delays, particularly within the protracted enquiry process, are detrimental to the growth and innovation within the SME sector.
“Accountants are navigating enough challenges without the added stress of uncertain and prolonged R&D tax relief for their clients.
“It is, in part, why there seems to be some shrinkage in the number of accountancy firms willing to offer these services, which is making it harder for SMEs to find trustworthy advisers.”
Ryan says that given this challenge many more accountants are exploring partnerships with R&D tax specialists like randd to deliver cost-effective and robust R&D tax services to SMEs.
randd is hoping that Revenue recognises the importance of a predictable and supportive tax environment, especially for small businesses at the cutting edge of technological change.
“The merger of the R&D tax relief system and the other changes implemented in the last year are clearly designed to make the claims system less open to fraud, but it has also made it more challenging for accountancy firms to deliver their services as well,” added Ryan.
For accountants grappling with the complexities and delays in R&D tax claims, partnering with a specialist like randd can offer a streamlined, stress-free pathway through the process.
Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and Revenue requirements.
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