Definition
A tax credit payment is the cash amount HMRC pays a company that has surrendered its R&D tax relief for a payable credit. The amount is the net surrenderable credit after notional tax and subject to the PAYE and NIC cap. HMRC has published a processing target of 85% of claims within 40 working days, though actual processing times vary, particularly for claims selected for risk review. Payment is made by bank transfer to the account on record with HMRC.
How HMRC defines it
HMRC guidance on the payable credit mechanics is at CIRD90400 and CIRD90500 of the CIRD Manual for the merged scheme and CIRD89800 for RDEC. HMRC's published service standards for R&D claim processing are updated periodically and reported in HMRC's monthly performance statistics.
Practical example
A loss-making software company files its R&D claim in June 2025 with a net surrenderable credit of £120,000. HMRC processes the claim and, in mid-August 2025, pays £120,000 to the company's bank account. A claim selected for enquiry would not be paid until the enquiry is resolved, which can take many months.