Impact of outstanding tax liabilities on R&D tax repayment claims
Impact of outstanding tax liabilities on R&D tax repayment claims
Thu 14 May 2020
Subject to the going concern condition, R&D tax credit repayments are restricted where there are outstanding tax liabilities. HMRC has, however, clarified that VAT payments due between 20 March and 30 June 2020, that are deferred due to Covid-19, will not be considered outstanding liabilities for this purpose. Thus R&D tax relief repayments will not be reduced by these particular liabilities.
As regards the going concern requirement, a message posted on the CIOT Covid-19 business tax page comments:
HMRC notes that this condition is a statutory requirement so it cannot be overlooked. It is noted that the condition requires the claimant company to have been a going concern according to the last published accounts, which will in many cases have been prepared before the effects of COVID-19. This means that there should not be any issue caused by the going concern requirement. HMRC will continue to monitor the impact of COVID-19 on customers’ ability to meet this and other requirements.
For further advice on claiming R&D tax relief under the SME scheme or the large company scheme, please get in touch with a member of the Mazars R&D tax incentives team.
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