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.
Jamie Young
Jamie is a seasoned business journalist and Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends.
When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.
