Author: Adam Spriggs, R&D Tax Director
Sceptical about claiming R&D Tax?
Despite so many businesses and advisors promoting the benefits of claiming R&D Tax relief; there are still those out there who are hesitant to invest the time and resources into making a claim either because they think it’s too good to be true, think the process would take up too much of their time or as one owner asked back in 2015 – “is this another Jimmy Carr type scheme?”.
My accountant told me I don’t qualify
An accountant is one of the most trust advisors a business owner can have and are often there from the beginning, so it’s natural that a business would take a gospel whatever their accountant advises them.
Most accountants are general practitioners and fantastic at advising on day to day tax and accounting compliance, however R&D Tax is a specialism. The fact that HMRC have a dedicated team, release annual statistics on claims and have a dedicated consultative committee should attest to this point.
Not having in depth knowledge on what constitute eligible activities does not making them a poor accountant – it’s like expecting a GP to perform brain surgery.
So if someone has reached out to you to discuss R&D Tax they have probably read about your company, seen or heard something you have worked on and are doing so because they think there is a very good chance you would be able to submit a successful claim. Most R&D Tax advisors operate on a contingent model so you really have nothing to lose to explore the opportunity.
I haven’t got the time
We’ll you might say you haven’t got the time to lose. Making a claim can be relatively straightforward and quick to ascertain if it is worth exploring based on how your work is structured, projects and general activities from a 15-30min call. So it is a minimal exploratory investment for something that could greatly benefit your business for many years to come
Once the claim process begins, the role of the advisor is to minimise your time investment, although the more time you can afford to it generally enables the claim to be more detailed, robust and in some instances larger.
In our own process, we like to start with a 2 hour meeting to go through the regime with you, discuss your projects and how we can apportion costs. Then once we receive the costs from yourselves there’s nothing else for you to do, apart from review the report once its complete. We can even prepare amended Corporation Tax returns if required.
With average SME claims being over £50k, business owners often comment that they wish they had looked into making a claim years ago.
Too much risk
Some people are scarred to rock the boat with HMRC and perceive submitting a R&D Tax claim as too risky, especially if they were to get an enquiry.
This is where working with a reputable company is key, as submitting R&D Tax claims isn’t risky as long as they are prepared with care, diligence, and by someone who knows what information HMRC is looking for. Providing information on the project background & commercial rationale, who the competent professionals are and even clearly stating that the company hasn’t received any grants or other form of subsidy are just some things that can decrease the chances of an enquiry.