HMRC crackdown causes 21% drop in R&D tax credit claims, stifling innovation – AbellMoney

HMRC crackdown causes 21% drop in R&D tax credit claims, stifling …

HMRC has reported a significant 21% drop in research and development (R&D) tax credit claims for the 2022/23 tax year, with the number of claims falling to 65,690 from 83,240 in the previous year.
Nikhil Oza, Partner at UHY Hacker Young, attributes the decline to HMRC’s increasingly stringent claim processing, which is discouraging small businesses from applying for tax relief they are entitled to.
Oza criticised the complex barriers now in place, including a time-consuming additional information form and the need for first-time claimants to notify HMRC in advance, which have led to many businesses missing out on valuable tax relief. He warned that HMRC’s overly cautious approach to weeding out fraudulent claims is hampering legitimate growth businesses and stifling innovation.
Oza emphasised the importance of ensuring that tax relief schemes for R&D are processed efficiently to encourage UK businesses to continue innovating and driving economic growth. He cautioned against excessive red tape, which risks further hindering the UK’s already lagging R&D spend compared to international competitors.
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HMRC crackdown causes 21% drop in R&D tax credit claims, stifling innovation