"My accountant is taking care of my R&D Tax Relief claim".
Two things we hear every day and that immediately set off alarm bells, not for us, but for companies that should be 'properly' taking advantage of HMRCs Research & Development Tax Relief scheme.
Now this isn't free money, or "too good to be true", it is not a reward; that would be like saying that a VAT return is "too good to be true" or a reward of some kind.
The scheme is setup as a way for HMRC to invest in companies that are being progressive in their field, by overcoming challenges to improve technologies and processes.
By paying these companies using an annual tax incentive, it facilitates their growth. Growing companies pay more… wait for it… tax.
HMRC estimate that for every £1 they give back through the scheme, they get a return of £2.84 in tax, which is why last year they gave over £7b in relief to UK companies.
-- Advertisement --
To continue the VAT return comparison, a VAT return is legal if it is done properly by somebody who has a full understanding of accounts, namely an accountant.
Where the comparison ends, is that an R&D Tax Rebate requires a detailed technical justification, which accountants are not trained or qualified to write.
It is for this reason that on HMRCs website for the scheme, they recommend companies use a specialist for their claim.
There are horror stories about companies having to pay their rebate back, and this has indeed been the case on some very rare occasions.
These occasions tend to be:
• Where the company activity included in their report was misleading or didn't actually fit the requirements of the scheme.
• Where the company has overclaimed and this has only been picked up by HMRC at a later date.
• Where HMRC has inquired the claim and the accountant/Director didn't have the technical knowledge or understanding of the scheme, to justify the claim.
As a specialist tax consultancy that exclusively files R&D Tax Rebates for construction, engineering and manufacturing companies; we only assign Chartered Engineers and Chartered Accountants to every one of our thousands of clients taking advantage of the scheme.
If you feel you are being misinformed and would like expert advice and clarification, we are always here for free expert advice: ben.henbest@harmoneyconsulting.co.uk
harmoneyconsulting.co.uk
