There are many blockers to businesses receiving annual tax credits or cashback via the government’s Research & Development (R&D) tax credits scheme, which has been in operation for 20 years to help maintain the UK as an innovative and attractive trading environment, with £41.6bn of tax relief claimed to date. Rob Sowden, innovation consultant from Business Cash Enabler, highlights some common misconceptions:
We don’t do any R&D
Regardless of the sector your business is in, do you carry out any form of unique innovation or bespoke activity that requires problem solving that isn’t readily deducible?
Solution: Obtain an assessment of your business’s technical projects from a claims management provider that has qualified technical analysts.
Our accountant hasn’t mentioned this / Our accountant doesn’t think we are eligible
They could be right, but what if they aren’t? Some businesses have missed out on hundreds of thousands of pounds over the years because of misconceptions about what qualifies as R&D.
Solution: Obtain a free assessment from a credible provider who will let you know one way or the other and underwrite the claims.
Our accountant claims for us each year
R&D is about technology. Does your accountant understand what you do as a business, able to have an in depth conversation with the head of technical projects? Does your accountant ask you to write the technical report?
Solution: Work with a provider that identifies all qualifying activities and writes up a compliant technical report, freeing up your time. Your accountant’s role doesn’t change and should be kept fully in the loop.
We already claim and have received cashback or tax credits
Did you know that many claims that have paid out are far less than they could be, with potential on average for around 200% more? Claim value uplift is almost always possible when a claim is compiled by the business itself or by its accountancy firm. When a claim pays out, it looks like success, but no one knows how much more it could have been.
Solution: Appoint a provider who will identify ALL qualifying activities, including internal IT projects that have involved innovation, such as bespoke software integration. If you claimed for the past two accounting periods, you may even be able to claim a shortfall by having a free assessment of what was submitted.
We have found a claims management provider with a lower success fee
This often catches businesses out as the assumption is made that a lower success fee equates to more cashback. However, the opposite is often true.
Solution: Consider a provider that uses technical analysts. This ensures that all qualifying activities are identified which will result in higher claim values. It is the net amount after fees that is key. Work with a provider where there are no upfront or abortive costs, just a success fee based on results.
For more information visit: www.businesscashenabler.co.uk
or call Rob Sowden on 07732 627085