The Momentum Group Welcomes Plans to Prevent the Misuse of R&D Tax Relief in Budget 2018
As part of the Budget 2018 announcement on Monday 29th October, Chancellor Philip Hammond unveiled new measures to help prevent the misuse of the R&D SME tax relief initiative.
The Chancellor stated that the Government will aim to stop the R&D Tax Credits system being abused through the re-introduction of a PAYE restriction for the small and medium sized companies’ scheme.
The Momentum Group, a multi-award-winning R&D Tax Credit advisory firm based in Bangor, has welcomed the rigour being introduced to the R&D Tax Credit relief process, ensuring that companies are provided with professional and strategic advice.
As part of the Finance Bill for 2019-20, the amount that a loss-making company can receive in R&D Tax Credits will now be capped at three times its total Pay As You Earn (PAYE) and National Insurance contributions (NICs) liability. This will come into effect for the accounting periods beginning on or after 1st April 2020. Any loss that a company cannot surrender for a payable credit can be carried forward and used against future profits.
Tom Verner, Group Managing Director for The Momentum Group, said, “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. Alarmingly, many companies are being misled and misinformed about the R&D tax relief initiative with assertions such as ‘everything you do qualifies’.”
At present, the R&D Tax Credit initiative is meeting its purpose of encouraging innovation and enabling UK companies to compete in a global marketplace, ensuring post-Brexit economic prosperity. To date, HMRC has identified and prevented fraud attempts on the SME payable tax credit, worth £300 million in total. In these cases, companies were set up to claim the cash available through the payable credit even though they had no legitimate R&D activity.
Tom continued, “The legislation pertaining to R&D Tax Credits is complex and HMRC’s criteria for qualifying activities and expenditure is intrinsically specific and definitive. Therefore, it requires an R&D Tax Credit advisor with technical expertise in a vast range of sectors to truly understand the detailed processes. Momentum welcomes a higher level of scrutiny as our approach has always been to apply the highest professional standards to every claim we prepare, resulting in a 100% success rate across hundreds of claims with over £100m R&D tax relief approved.”
Momentum has helped hundreds of large and small highly competitive companies, from manufacturing to construction, food & drink to technology, to claim this UK government incentive. The multi-award-winning advisory firm assists in a range of areas, investing in understanding and optimising R&D expenditure. The team includes chartered accountants, business, commercial and ex-HMRC technical experts to ensure every claim gets the necessary expert scrutiny and is thoroughly investigated to meet HMRC compliance, preventing the misuse of R&D Tax Credit relief.
To find out more about R&D Tax Credits contact Momentum on 028 9140 4030 or send an email to firstname.lastname@example.org
Photo via See Li/Flickr (CC BY 2.0)