Talking Tax: January 2023
Author: Adam Spriggs, R&D Tax Director
Despite January usually being a comparably quiet month for submitting R&D claims, the R&D team have submitted a number of claims in the software industry as well kick starting a claim for an existing client. Our new clients however, came from different ‘awareness background’.
Some were advised to seek out an R&D advisor or knew of the scheme before they even established their business whilst others had worked within regulatory sciences, running research studies for multiple years but were completely unaware of the scheme.
This goes to show
that awareness of the R&D Tax Credits is still lacking despite recent press and that just because a company didn’t know that the scheme existed contemporaneously to the work being undertaken, it does not mean that such claims are fraudulent.
On the flip side we also had two conversations with companies that are not undertaking R&D activities, despite assuming that they already had. In our role as advisors, the educational element to our job is just as vital to the integrity of the profession as ensuring that those that are eligible are provided with the level of detail that HMRC require to approve their claim.
Other News: Single Scheme Launch
This month, HMRC launched another consultation to seek feedback on the merging of the two R&D schemes into one. This has been a long time coming and somewhat inevitable following the UK leaving the EU, and with the two net benefits leveling out after November’s Budget, it will be interesting to see what measures are kept/discarded from each scheme. Whilst SMEs are going to lose out and large companies will benefit initially, ultimately it should help improve the certainty of the scheme given the ambiguity over the subcontracted and subsidised position following the Quinn case in 2021 (which seems to be one of the focuses of the consultation) as well as potentially reward more R&D intensive companies. More insight on this will be provided in the coming weeks.
For help with making an R&D Tax Credits or defending your claim from a HMRC enquiry, contact Adam Spriggs on email@example.com