R&D Tax Relief is complicated, the guide at HMRC https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird80000 covers a multitude of areas and covers several hundred pages across both the SME Scheme and Research and Development Expenditure Credit (RDEC).
It covers things such as:
- Qualifying conditions
- Eligible costs
- Differences between the SME Scheme and RDEC
- How to treat R&D expenditure covered by a grant or a subsidy
- How despite Brexit, EU rules are still applied to the definition of an SME and the amount of repayable tax credits that can be paid
You can do it yourself
You can take the chance, you might get lucky, HMRC are stretched when it comes to reviewing R&D Tax Relief claims, you might get lucky for three or four years, but then HMRC might look at a claim, it looks slightly higher than what they have come to expect. They open an enquiry into your last claim, they ask you a number of questions about how you determined that the work you were undertaking represented a global advance in science or technology. The explanation you provide doesn’t quite convince them, they think that you are just improving your own knowledge and capability, they decide as a result to open an enquiry into all of the other claims you have filed for exactly the same reason, the £150,000 that you have claimed and spent over the last four years, suddenly needs to be repaid, you don’t have it!
Am I scaring you? It’s not completely unintentional, but it could happen. However, worse still is it could still happen even if you have employed an R&D Tax Relief Consultant. Not all companies purporting to be R&D Tax Credit Experts will continue to support you in the event of an enquiry, some will work on a fixed fee and then leave you to pick up the pieces or pay a lot more to them to support you with an enquiry. It’s not all of them, but there are some!
We won’t leave you in the lurch
Our “No Claim, No Fee” promise means that we don’t get paid if your claim is unsuccessful, it also means that we will defend your claim through an enquiry with HM Revenue and Customs, if that claim is retrospective and after you have received a refund, we will reduce our fee if the enquiry reduces the value of the claim. To date we have claimed around £20m for companies of all shapes and sizes, our largest claim has been over £1m our smallest about £2,000, in the 8 years the company has been operating our claims have been enquired into 6 times, we have defended them all successfully and more than 99% of the costs that we have claimed have been accepted. In fact our first ever piece of work was to help a company with an ongoing enquiry to successfully close it by examining the corporate structure and during the enquiry we noticed that the company hadn’t claimed for subcontractor costs in their claim, which enhanced it by a further £30,000.
If you work with the right Tax Consultant your risks are greatly reduced, it is absolutely not risk free, but the risks are shared, but the knowledge and expertise that you gain, may not only increase the value of your claims, but it may also give you additional piece of mind.
To start your R&D Tax Credit journey with an R&D expert, you can book a free, no obligation discovery call at www.calendly.com/simon-bulteel .