Choose Your R&D Tax Credit Partner Wisely
The latest statistics from HMRC revealed that R&D Tax Credit claims are on the rise with an increase of 19 per cent in the total relief claimed and 20 per cent increase in the number of companies claiming across the UK.
This is great news for businesses and the UK economy as it evidences that the incentive is meeting its purpose: to encourage innovation and enable UK companies to compete globally.
Like any marketplace that experiences a surge in demand for services, the number of companies providing ‘professional’ R&D Tax Credit advice has grown significantly. So called R&D Tax Credit specialists seem to be popping up at an alarming rate. What’s more worrying though is the feedback that we are receiving from stakeholders on the quality and validity of the advice that is being given by many of these new ‘pop-up’ companies that range from one man in his garage to inexpert opportunists.
We have been told that many people are being misinformed and mislead with assertions such as “everything you do qualifies” and “this will only take a few hours”. Specialists with knowledge and expertise of the guidelines and legislation for R&D Tax Credits will know that these statements are far from the truth.
The legislation pertaining to R&D Tax Credits is complex, and HMRC’s criteria for qualifying activities and expenditure intrinsically specific and definitive. So much so that it requires an R&D Tax Credit advisor with technical expertise in a vast range of sectors to truly understand the processes that an organisation goes through when carrying out projects. It is only those that possess a combination of technical expertise along with in-depth knowledge of the legislation that can recognise what does not quality whilst having the ability to uncover hidden activities and expenditure do qualify.
By its complex nature, the process takes time. Actually quite a long time. Through experience we know that it is not possible to create a fully optimised claim in a few hours or a single day. Companies that claim to be able to do so simply aren’t carrying out the technical analysis and financial examination that is required.
Your specialist R&D tax relief advisory firm should have a proven methodology that streamlines the process from start to finish. This process will involve input from R&D technical analysts, R&D finance experts and specialist business advisors to ensure that the claim is robust and that all technical supporting documentation is HMRC compliant. We guarantee this all takes a significant amount of time. Quick does not equal thorough when it comes to R&D Tax Credit claims.
Not surprisingly HMRC is responding to inaccurate claims with significantly increased scrutiny. Our advice is that companies must ensure that their R&D Tax Credit advisor has the knowledge and expertise to create accurate, robust and fully optimised claims. Claims that include activities that do not qualify will put the claim in jeopardy of further scrutiny, potentially fail or attract penalties.
When it comes to choosing your R&D Tax Credit partner make sure you carry out some due diligence of your own. Use the hallmarks below as a gauge to ensure that your advisor is credible. A reputable R&D Tax Credit advisory firm should be able to evidence:
- Expert knowledge of the legislation
- Technical expertise across a wide range of sectors
- Proven methodologies and robust processes
- Comprehensive systems that ensure the security of your data
- Links to HMRC and insight into legislative changes
- 100% success rate in claims submitted
- Ethical standards and credibility
In 2016 HMRC claimed back £420m for relief that was issued but subsequently found to be ineligible. This alone is a warning to companies to ensure that their claims are robust and compliant with the legislation.
A final word of warning about the one man in his garage or inexperienced opportunists offering extremely low fees – as the old saying goes - if it sounds too good to be true, it probably is. With an increase in this activity we are hearing more and more horror stories and as we mentioned earlier HMRC is taking steps to claim back.
If you are unsure about a pending or previous claim or would like expert advice on how to optimise your claim please contact a member of our team today via email@example.com or 028 9140 4030.