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The impact of Coronavirus on R&D Tax Claims

With the Government announcing various new schemes to help businesses during this unprecedented time, how will this affect their R&D tax claim scheme?

As businesses are facing short-term cashflow issues now more than ever is the time to review if you are able to make an R&D tax claim. HMRC have ensured there are enough resources to process claims and they are still achieving their target of handling 95% of claims within 28 days. At R&D Tax Box we have processed claims a lot quicker than this for some of our clients, mostly recently in just six working days.


HMRC may also be sympathetic to companies who miss the deadline for filing for R&D tax credits on account of Coronavirus. Companies must file for R&D tax credits within a year of the end of the financial period in which the development occurred. This has not changed but given the current situation HMRC may look more favourable on any late claims. 


Another issue that has arisen is can a company apply for a Coronavirus Business Interruption Loan and file for an R&D tax credit claim at the same time? One of the stipulations of applying for an R&D tax credit is the business should not be receiving any other notified state aid for the same project.

If a loan application was to specifically state that it was required to fund an R&D project, then this would qualify as receiving a notified state aid and R&D tax credit claim would not be possible. However, if the loan application is for general business operations and this is documented on the loan application form and in all meeting notes then there should be no issue with claiming an R&D tax credit. 


With cashflow being a major issue for businesses right now, R&D tax credits are a fantastic source of cash to replace lost revenues.