Talking Tax: January 2022
Author: Adam Spriggs, R&D Tax Director
Very interesting past few months in the world of R&D tax. Following the release of the Quinn FTT decision, in which HMRC’s policy regarding what is classed as subsidised R&D was rejected, HMRC have confirmed that they will not be appealing this decision however they will stand by their position. In addition to this, they have updated their CIRD guidance on both subsidised and subcontracted R&D. It is important, more so now than ever, to ensure that clients are properly assessed and aware of any risks to their claim, if claiming under the SME scheme is being caught by this.
Zeal carried out a capital allowances review for a company that owned a site containing luxury lodges and a selection of holiday let properties. Zeal identified that there were unclaimed capital allowances on the c.£600k Following a referral from an accountant who we work with; Zeal completed a claim for a small engineering firm who appreciably improved an existing product from their range as well as developing a new modular testing rig. The team at Zeal worked with the client to identify which of the many projects they undertook would and wouldn’t qualify, and then liaised with the accountant for all financial information. Once the claim was approved by the client Zeal then worked with the accountant in submitting the Corporate Tax Return.
Zeal completed another year’s claim for a £20m+ turnover manufacturing business. The business conducts R&D in a range of areas from new and improving existing products, operational efficiencies in their manufacturing factory as well as work they specifically undertook in response to the COVID pandemic in the development of a machine to mitigate the risk of catching COVID in office and hospital environments.
As we look forward to 2022 where we anticipate working with more businesses undertaking R&D in response to COVID, as well as ensuring the various government schemes and grants, such as furlough, are properly adjusted for in claims.
If you would like more information about how your business or clients’ business could claim R&D Tax Credits, get in touch with the team.