London, United Kingdom – May 2020 – Early indicators suggest that HMRC have fulfilled a commitment to process 95% of tax credit claims within 28 days, to support SME cashflow during the Covid-19 crisis.
At the outset of the Covid-19 pandemic, HMRC made an undertaking that 95% of tax credit claims would be processed within 28 days of submission. In a letter to the Chartered Institute of Taxation in early April, HMRC sought to allay concerns that pressures on operational resources would result in backlogs and pledged to actually accelerate claims processing, to support SME’s cashflow during the crisis,
Despite initial scepticism from the industry, early evidence from specialist construction management consultancy, Invennt, suggests that HMRC have met this obligation. Tim Fitch, director and co-founder of Invennt said, “this is great news for construction claimants. Business’s in the industry need help to strengthen their cash position during this period and the R&D tax credit scheme is a great way for them to release additional working capital. We welcome the efforts HMRC have taken to process payments in a timely fashion.”
The uncertainty over whether HMRC would be able to meet its commitment followed delays reported by authorities in other jurisdictions that offer comparable tax credits and the absence of any official changes to the tax code. Andy Hastie, who heads up Public Relations for Invennt said, “people were understandably incredulous when this target was first announced because the statutory requirement to process claims within 12 months remained unchanged, but it is clear that work has begun in earnest to achieve the 28 day target and that is fantastic news for the industry.”
Invennt, the market leader for construction industry R&D claims, has revealed that 100% of claims submitted on behalf of clients since HMRC announced the target have been processed within the 28-day time limit set out by HMRC. Which Hastie says is crucial to mitigate the impact of the economic downturn, “these payments are an important buttress against the cash pressures many construction businesses now face, many of which are already taking on additional debt.”
Fitch agrees that the R&D tax credit scheme is a lifeline for construction companies, “the measures the government have announced to alleviate the impact of Covid-19 are important, but R&D tax credits are arguably even more beneficial because companies are already owed the money and they don’t need to pay it back, so it is a great way to inject cash without leveraging the business.”
But Invennt say that despite positive developments in the speed at which claims are processed, many businesses still don’t realise that they qualify, “this is because most construction businesses are eligible for the incentive, but don’t realise it because they need someone to translate the definitions of R&D and apply them to a construction context, so we will continue to fly the flag for the industry and identify the many areas of innovation that businesses in the sector undertake.”
For media enquiries, please contact Andy Hastie on +44(0)7948 281571 or email firstname.lastname@example.org.
Invennt is the UK’s leading specialist construction Business Consultancy. The business was founded by Tim Fitch and Brendan Morahan to help the construction industry get greater value from their investments. The company’s services include business strategy development, productivity & operational improvement, business development and marketing, collaboration and R&D tax credit claims.