There are numerous reforms to HMRC’s R&D tax relief scheme, some of which came into play on 1 April 2023, and others later this year and next year. One of the new requirements is for claim reports to be more comprehensive and be accompanied by a new form.
Given the increased compliance measures imposed, it is now more important than ever to ensure peace of mind and consider working closely with a specialist R&D agent to assist with the compilation of a claim.
In this blog, Grant Quigley, Senior R&D Tax Manager at Catax (a Ryan company), explains the benefits of working with an R&D tax relief specialist.
There is no better time to consult an R&D tax specialist, who will undertake strict quality control over each claim prior to it being submitted to HMRC, leaving your business to resume to business as usual without worrying.
R&D tax specialists are well-versed in spotting research and development within projects. For a business owner, this can be a difficult task as what you may think qualifies may not, and vice versa. An R&D tax specialist can do all the hard work for you and ensure your claim is maximised and no eligible projects remain uncovered. For example, many businesses omit some projects on the basis that they were unsuccessful, but R&D tax relief is available for successful and unsuccessful projects providing the scientific or technological advance to the industry is evidenced. What’s more, once the full scope of R&D projects has been unearthed, R&D tax specialists will then take the reins and prepare a comprehensive report for HMRC on your behalf, detailing all relevant information and justification of why the projects meet the criteria.
There are a whole range of costs that can be claimed for under the R&D tax relief scheme as part of a claim. This includes expenditure on water, fuel and power; subcontractors and externally provided workers; software and consumables, as well as direct staff costs for people directly involved in the R&D activity (salaries, bonuses, employer NIC and employer pension contributions). An R&D specialist will have a team of experts that will not only calculate the full value of qualifying costs for a claim, but be able to identify when these costs can be included or not.
Working with businesses across numerous industries and sectors means that R&D tax specialists should have in-house sector experts who have experience in specific areas. This allows for understanding between the client and adviser, an increased level of trust and, an assurance that a business will receive the full value of their claim for innovation.
Compiling all the information and submitting an R&D claim takes time. The process requires an expert eye to identify R&D as well as produce a report for HMRC. Without this experience, the process can be time-consuming for a business owner or accountant, valuable time that could be spent elsewhere for your business. From identifying eligible projects to writing project summaries and compiling the finances, a specialist can manage all this for you.
Be mindful that technology can’t always be a replacement for using a professional within that field. Self-claim R&D software provides a template for supporting claim documents but effectively removes the human element from a claim. Whilst this may be a cheaper option to using an R&D tax specialist, the business is not going to get as strong a result from their claim and it will likely be less thorough. Having a specialist working alongside your business means they can get to know where the R&D lies within projects, and have conversations with the business owners, which a piece of software can’t do. Self-claim software may ensure automation and ease, but it doesn’t offer the comfort of knowing that there is a real team on hand at all stages to support and protect you.
Don’t just take our word for it – take a read of some of our client testimonials!