Case Study: Why you should use a tax specialist for your tax relief claim

Date: January 29, 2020

One of the most common questions we get asked is why a business should choose to use an R&D tax specialist to submit their claim, rather than relying on their accountant.

Our Head of R&D Technical Operations, Nigel Holmes, wrote a great article about this previously (which you can read here), but we thought it would also be useful to share a case study which brings this to life a bit more.

During an event last year, one of our Regional Development Directors had a conversation with an Institute of Financial Accountants (IFA) member regarding a client of theirs who had wanted to make an R&D claim but did not want to work with a specialist tax consultancy. They decided instead to complete their claim with a separate Chartered Accountancy Firm.

When it came to submission, instead of providing the report that is required to make a claim, this firm offered a simple spreadsheet of relevant costs, without any of the backing documents to support it.

When the client’s accountant questioned this, the accountancy firm pushed back against providing anything further, claiming this was not required, and asked the client’s accountant to submit the claim regardless.

The client’s accountant was so sure that this was the wrong approach that they ended up drawing up a letter of representation stating that this was against their specific advice, and that any subsequent investigation would be at full cost to the accountancy firm.

The submission resulted in a full-scale investigation into both of the client’s tax years. The client chose the new acting accountancy firm to respond to all queries, who’s responses were insufficient and did not justify making an R&D claim. The client was then threatened with penalties for submitting a false claim.

At this moment in time, the claim is currently under appeal and the client is out of pocket to both accountants for the work attributed to this and their individual commissions.

R&D tax relief claims are complicated, many accountants are recognising the benefits of working with a specialist in order to submit the best possible claims for their clients.

At Catax, we have been claiming R&D back for our clients since 2014 and have teams dedicated to doing just this. We work closely with thousands of accountants across the UK to offer a value-added service to their client base and ensure they are receiving the best possible benefits for their innovative research and development.

If you’d like to find out more, why not Contact Us

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