If you are a business owner or CFO of a UK business, the prospect of filing your company's R&D tax credit claim can be both daunting and stressful. However, one aspect that can ease those burdens is working with a specialist.
What do I mean by an R&D specialist?
A specialist will be an individual who has been tax trained and has extensive practical experience working as an R&D tax credit consultant. They can help your business with its self-assessment reporting requirements in relation to preparing and filing a successful claim for R&D tax credits (the UK government's scheme that provides a corporation tax reduction or cash credit to businesses based on qualifying R&D expenditure).
Many businesses are not aware that the R&D tax credits industry is not regulated. Businesses are also not always aware that R&D tax credits is a tax service, requiring tax advice and a knowledge of the framework of corporate tax legislation applicable to R&D tax credits. Tax advisers offering this service will be regulated and qualified tax professionals.
A qualified tax professional will have experience in research and development tax credit claims as well as a broader tax knowledge base relevant to corporate tax legislation of which R&D tax credits legislation is a part thereof. They will also have an understanding and experience of communicating with HMRC. A qualified tax professional will have completed the Chartered Institute of Taxation's or Association of Tax Technicians’ Certified Professional Tax Examinations.
The Chartered Institute of Taxation has recently issued guidance for Professional Conduct in Relation to Taxation specifically for practitioners acting for clients to prepare R&D tax credit claims. Chartered tax advisers (CTAs) are therefore regulated, reputable tax service providers, required to operate with professional integrity.
What makes working with a tax specialist different?
The main difference between working with a specialist and doing it on your own is that a specialist will guide you through the process and let you know what needs to be done.
They will also be able to prepare:
- The narratives for the technical parts of projects to link everything to the BEIS guidelines.
- The tax technical content to explain any areas of risk, considerations or methodologies applied and conclude on the filing position adopted.
- Identify and advise on the correct application of associated qualifying expenditure.
- Undertake the claim calculations comprehensively.
This can save your business time and money in the long run.
How will a chartered tax adviser help with your R&D credit claim?
Working with a specialist brings lots of benefits; long-standing expertise, industry knowledge, efficient processes, streamlined approach, and advice and guidance, to name just a few!
Saves your team's time, money and effort
You want to make sure your R&D tax credit claim is as accurate as possible. A specialist will be well-versed in how the schemes work, so they can identify with you which of your projects qualify and explain which types of expenditure can be included. It might even be the case that you didn't know if your organisation was eligible until speaking with an expert.
A big part of the claim process involves preparing a supporting R&D tax credit claim report that gives HMRC everything in the format they need to check the pertinent aspects of tax legislation and BEIS guidelines for R&D have been correctly understood and applied. A specialist can help you with this, making your life easier. They can also advise you on how to claim for things that your business might not have known qualified for this generous tax relief.
This avoids lengthy research by yourself or your team only to remain baffled by the overwhelming amount of material available from HMRC! With a specialist, you don't have to worry about spending time looking into the best options, making decisions you're not sure of or making mistakes in your claim.
It's worth getting professional advice; the fees are a significantly lesser financial outlay compared to the time-cost and stress of going it alone. Plus, you're likely to end up with a larger claim by doing things the right way - a specialist will know exactly what you can include in your claim and how the intricacies of tax legislation apply to certain scenarios.
Working with an expert might be especially helpful for smaller businesses that don’t have dedicated tax or finance departments.
Familiarity with the latest changes in legislation
A specialist will keep up to date with all the latest news and updates from HMRC, which is great because it means you won't miss out on any of the benefits available through the R&D tax credits schemes.
HMRC will occasionally move the goalposts in terms of how they interpret legislation and so it's important you work with someone who has their finger on the pulse of R&D tax.
A good adviser will also be well versed in tax changes and legislation. For example the recent introduction of the PAYE and NIC cap for the SME scheme and the current HMRC consultation around potentials for wholesale changes to the SME scheme.
You'll receive accurate advice
R&D tax credit claims can be complex and confusing - a specialist R&D tax adviser will know the eligibility criteria for claims, so they're in an excellent position to offer support and maximise your claim.
The right advice from a specialist helps your business make informed decisions on whether a project can be claimed as R&D or not, while ensuring nothing slips through the net!
They'll help you determine which types of expenditure qualifies and discuss with you how to link qualifying expenditure to qualifying project work.
They'll also ensure your business is aware of any areas of tax risk and discuss the fact patterns around these aspects to document and portray the correct filing position to HMRC: eligible expenditure categories or which scheme (RDEC or SME) a project may be included under within your claim for example.
The claim process will be managed seamlessly
A professional will be able to guide you through the process of filing an accurate claim on time, allowing HMRC to review your submission and process your payout in a timely manner. They will help you speed up the process by setting tasks and deadlines to progress your claim, and of course, by taking on the lion’s share of the preparatory work for you based on information and data obtained from you.
What's more, specialists have done these claims hundreds of times, so you'll be guided through a robust process, from start to finish, as your chartered tax adviser takes you through the process step by step. This is especially helpful for businesses that don't have spare in-house resources to deal with such things.
Your tax adviser will be able to provide ongoing ad-hoc advice on other matters that may impact the size of claims or the eligibility of your business to continue making R&D tax credit claims, such as the implications of mergers and acquisitions or restructuring of the business and its people/assets used in R&D. This means you'll get more timely advice to consider alongside wider organisational strategies to find the best way forward and avoid costly oversights.
Having tax advice and support at your fingertips will save you time and money, enabling you to focus on what matters - improving your business and playing a key role in its success!
Ready to use a chartered tax adviser to prepare your claim?
There are lots of intricacies involved in R&D tax credits and it can be difficult to keep track of all the rules and regulations.
In short, working with a specialist not only helps ensure that your business receives the maximum financial support it is entitled to under the R&D tax credit schemes, but also enables it to manage its R&D tax credit claims with confidence.
As a specialist tax adviser, I provide a comprehensive service to help you claim R&D tax credits for your company – from identifying eligible projects to preparing supporting R&D tax credit reports, inclusive of HMRC enquiry cover should this be required. I work closely with my clients by understanding their specific needs and providing tailored advice on getting the most out of this valuable relief. In addition, I start all of my partnerships with a free initial consultation.
If you're ready to discuss your company's R&D activities or just want to find out if you should pursue a claim for your projects, book a call with me to explore the possibility for your company to claim and where possible, estimate the potential financial benefit available.