Could the Mining and Quarrying Sector Potentially Be Missing out On Tens of Thousands of Pounds
Article taken from Plant and Civil September/ October 2018 addition 16.10.18
R&D Tax Credits are one of the most valuable forms of tax relief available in the UK, but the Mining and Quarrying sectors are not taking full advantage of this generous tax benefit. Many of the qualifying activities that may be regarded as ‘day-to-day’ operating behaviour could actually qualify for R&D tax relief.
R&D is an integral part of the mining and quarrying sector and the R&D tax relief available is very generous. Indeed, R&D is actively encouraged and paid by HMRC through the Government’s R&D Tax Credit initiative which is designed to stimulate innovation by encouraging companies to invest in research and development. All companies who are subject to pay corporation tax could potentially claim R&D Tax Credits for showing levels of innovation. Real tax savings can be achieved whether your company is tax-paying or loss-making. It’s not simply a tax credit, many companies prefer to take it as actual cash instead. The types of qualifying R&D expenditure typically include staffing costs, software, utility bills, materials and possible subcontracted costs. These R&D costs can be enhanced by up to 230 percent for SME businesses and in the UK the average R&D claim for SMEs is £61,000.
R&D Tax Credits have been around for 18 years; but since 2010, the paybacks have become so lucrative that many UK businesses have started to take notice. However claims in the mining and quarry sector are lower than other sectors. This means that many mining and quarrying companies are not claiming R&D Tax Credits to which they are entitled.
So why aren’t companies taking advantage of R&D Tax Credits? According to R&D Tax Credit specialists the Momentum Group, this is due to two main reasons.
- Lack of awareness,
- Not fully understanding which activities and costs qualify
Momentum Group Managing Director, Tom Verner, commented: “HMRC statistics for 2016 showed a high percentage of claims in sectors traditionally associated with R&D Tax Credits. I believe one of the biggest issues with companies not claiming their full R&D tax relief, is that many believe R&D Tax Credits are only available for traditional research sectors and ‘white coat’ industries.”
“As the only local company specialising solely in R&D Tax Credits, Momentum partners with every sector from manufacturing to engineering, food and drink, digital and technology, and everything in between, to ensure they claim what they are legitimately entitled to. To date we have helped companies of all sizes and across numerous industries to claim over £100m R&D enhanced expenditure.” he continued.
In July 2018 Ron Gibson, Momentum’s Operations and Technical Director attended a HMRC R&D Consultative Committee meeting. HMRC recognised that a number of ‘so-called’ R&D providers have entered the marketplace. In response, a new unit is reviewing a significant number of claims for issues including a lack of information, failing to meet the criteria and suspicious claiming activity. Momentum welcomes a higher level of inspection as their approach has always been to apply the highest professional standards to every claim they prepare, resulting in a 100% success rate across hundreds of claims with over £100m R&D tax relief approved.
When it comes to choosing your R&D Tax Credit partner make sure you carry out a level of 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
- Work and engage with your external accountant
Momentum has been working hard to raise awareness of R&D Tax Credits amongst companies in the mining and quarrying sector. The company is successfully working with leading accountants, banks and financial institutions and many others across the UK to raise the profile of this generous tax relief.
The R&D specialists are calling on all mining and quarrying businesses and their accountants to take action this year to explore this valuable incentive.
If you would like to find out more about a potential new claim, or review an existing claim then please contact Momentum for a free no obligation review.