U.K. Taxman’s Delays Put Pressure on Brexit-Hit Companies

U.K. companies are facing delays of six months and more in getting credits from the country’s tax authority, putting additional pressure on them amid the uncertainty of Brexit.

Unpaid claims worth tens of thousands of pounds from two research and development programs stretch as far back as December, according to Mike Baker of ABGI UK, which helps businesses apply for R&D tax relief. They should be processed in 28 days, he said.

The snarl-up threatens to particularly affect small and medium-sized companies because many exist “hand-to-mouth” during their expansion phase, when they are ramping up R&D expenditure, according to Seamus Nevin, chief economist at Make U.K., the industry association for British manufacturers.

“They need a consistent flow of cash coming into the company, so having to wait months at a time to access government tax credits has left many smaller employers in a precarious condition,” Nevin said. “At a time when business investment has been collapsing and trade uncertainty growing, these firms need government to lead by example and help ensure companies have the confidence they need to spend money that will ultimately create jobs and wealth.”

Article originally published on Bloomberg.com

Read the full article here