The rise of the unscrupulous R&D Tax Credits expert

Over the last 12 months there has been a lot of talk in the accounting and tax profession about the rise in the number of “R&D Tax Credits Experts” coming into the market and even more concern about the quality of the work that they produce.

There has also been a significant rise in the number of cold calls that businesses are receiving from sales teams at these new “experts”, promising thousands of pounds in cash for your business.

Sounds familiar, I hear you say! Well, that’s because it is. With the closure of the PPI claims industry, a number of people who set up claims’ management companies to make a fast buck, have turned their attention to R&D Tax Credits for the next fast buck.

They are treating the process like a claims’ management company would. Pile in a load of stuff in the funnel let some of it fall by the wayside and pick up the cream at the bottom. They are relying on the fact that HMRC doesn’t have the manpower to check every claim and that if most of them get through, they’ll do all right.

Is that the right way to approach things? Of course it’s not. The idea of R&D Tax Credits is to reward companies who are taking a significant financial risk in developing new, or improving their existing products, processes, materials, devices and software, not to throw a load of spurious brown matter, that might be mud, at a wall and see what sticks.

It is fair to say that the legislation is complicated and that many businesses don’t have the capability to understand it in its entirety, let alone apply it to their circumstances, so there is a place for a genuine expert to support a company to claim.

If you are told claiming is “risk free”, because you won’t pay us a penny until you get your money back, you’ve been told a mistruth, it is risk-free in terms of your liability to the company that prepared your claim, but your liability to HMRC could be significant, with interest levied on refunds that are subsequently clawed back and significant penalties for the most spurious of Tax Credit applications and smaller penalties possible for an incorrect claim.

We’ve been around for 8 years, I’ve been a qualified accountant since the turn of the Millennium, I was involved in my first claim in 2005 and have been preparing claims since then. For the next 8 years it was for my employers in Clinical Research and Motorsport Engineering. Our Lead technical report writer has a PhD in Computational Fluid Dynamics and was a serial researcher at a number of prestigious Universities around the world, before working on the Fuel Systems at Airbus and then working in the IT industry before starting to write technical reports for a number of larger specialists.

Here’s our short checklist of things to do before engaging a R&D Tax Credits Expert

  • Check out the business at Companies House to see how long it has been in existence
  • Check out previous directorships for the directors of the business on Companies House
  • Check out previous roles on Linked In for the owners and staff, is there an expert there?
  • Find out what their definition of “Risk Free” is
  • Do they have Professional Indemnity Insurance that covers you if they get it wrong?
  • Ensure that you receive a copy of the technical report to read through to ensure that what they have written, reflects what you have done. That is in effect what you are paying them for and what HMRC will judge your claim on. If it’s full of lies and inaccuracies, don’t expect HMRC to be lenient because “they didn’t share it with us.”
  • Be wary of someone who completely cuts your accountant out of the loop

Are we perfect? 99.5% of the time!

Oh and don’t get me started on the software to support accountants prepare their own claims. If you don’t know what qualifies for R&D Tax Credits how is a piece of software to help you prepare the claim going to help!

If you’d like a no nonsense, reduced risk approach for your R&D Tax Credits claims or an expert to support your clients, get in touch with us. Book a 15 minute call at www.calendly.com/simon-bulteel or visit the website at www.coodentacconsulting.co.uk

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