There are thousands of pounds being lost in tax relief by eligible companies every year. This reflects the common misconception that Research and Development (R&D) is confined to manufacturing plants, tech giants or research laboratories when in reality, the ideas and inspirations that move industries forward have their roots in everyday innovation by the professionals on the ground.
R&D tax relief is the government’s way of rewarding businesses that invest in innovation. This innovation can be in the form of developing new, or improving existing products, processes, services, devices and materials or advancing the state of knowledge in their sector.
You can get a deduction from your corporation tax bill or even receive a cash payment from HMRC for your R&D tax credit claim
Key stages in ascertaining an R&D tax credit claim include:
• Discussing your technology in detail to figure out if it does indeed qualify
• Evaluating your technology with consideration of which R&D Specialist Unit will be looking at it (different ones have subtly different criteria)
• Preparing a technical narrative that presents your technology in the best possible way to minimise the chances of an audit
• Calculating the size of the claim based on HMRC’s ever-changing criteria (which are also specific to each R&D Specialist Unit)
• Filing the claim directly with a specialist unit to ensure that it is looked at by a specialist (and not an HMRC inspector who suddenly takes an interest in tax credits but has never looked at a claim before)
• Following up on that filing to ensure it is looked at promptly
• Providing a first line of defence when handling questions from HMRC (including ones about the technology), so that unless an audit is requested, you don’t even need to worry about the claim and just wait for the money to come in
• If an HMRC audit does occur, prepping key tech and finance members of your team so that they know how to answer questions in the most favourable way, and sitting in the audit meeting with you to help handle HMRC questions.
Ascentant Accountancy are Accountant’s based in Derby who specialise in working with Small Businesses across the Country – Get in touch on 01332 981920 or info@ascentant.co.uk to discuss your needs.
We can be found at Suite 5 Keynes House, Alfreton Road, Derby, DE21 4AS.
