Published 17/06/2019
Modified 09/02/2023
5 min read

Are you optimising your R&D Tax Credit Claim?

Maximising your R&D Tax Credit claim requires the expertise of an experienced specialist. Innovation Tax offer a free, no-commitment review to help you extract the maximum benefit from your claim. 

Are you optimising your R&D Tax Credit Claim?

R&D Tax Relief is not simply an opportunity for UK businesses to get funding; it’s an entitlement for any innovative UK business satisfying the definition of R&D for tax purposes.

However, did you know that a large number of companies are not still taking advantage?

Many companies are simply unaware of the scheme and that they are undertaking eligible ‘qualifying’ activities; worse still, others are being told that they DO NOT qualify. On many occasions, Innovation Tax have found this not only to be untrue but have then engaged with these businesses and gone on to identify a significant cash benefit for them.

The R&D Tax Credit scheme is deliberately broad in its scope.

The definition of R&D per HMRC can be applied to companies of all sizes across a wide range of industries. At Innovation Tax, we never rule out any company based on a predefined criteria; instead we talk to businesses and discuss the activities being undertaken before making a recommendation on eligibility.

Even if you are already claiming, Innovation Tax can still help.

Some companies we talk to are already claiming internally (using their own staff or their accountant). In many cases, following a free no-obligation review of their historic claims, we find that whilst a robust and accurate claim is being made, many are significantly lower in value than we would have calculated. This is due in part to a lack of understanding of the legislation and also to a lack of relevant industrial experience in fully identifying all qualifying expenditure. Responsibility for claim outcome is effectively placed firmly on the clients’ shoulders, and the outcome is that the claim is not maximised and the company has not claimed their full R&D entitlement.

optimising your R&D Tax Credit Claim, Are you optimising your R&D Tax Credit Claim?, Innovation Tax
A Government incentive scheme for UK Ltd companies, rewarding innovation and fuelling growth, R&D Tax Credits have the power to transform your business – yet many businesses are not maximising the value of their R&D claims.

Why do so many businesses fail to capture all qualifying R&D expenditure and therefore under-claim the full amount of R&D Tax Relief they are due?

Under-claiming businesses tend to capture a small percentage of staffing costs in the mistaken belief that only the most ground-breaking of projects qualify. In truth, the tax definition of R&D is far broader and when we look beyond the people in the ‘R&D Department’, we often find significantly more staff were actually involved; qualifying activity is often hidden around the business.

Another area regularly under-claimed is ‘Consumables’, materials used up during a project and deemed to be of no further value as a result. Our ‘walk-the-floor’ approach ensures all your potential R&D activity is captured, even the modifications to that rusty piece of equipment sitting behind the workshop that’s waiting to be scrapped!

Why do first-time claimants often fail to optimise the value of their R&D Tax Credit claim?

Submitting your first R&D tax credit claim can be daunting and claimants tend not to have particularly good record-keeping procedures in place for project time and costs incurred. And whilst HMRC accept this and are reasonably comfortable with a reliance on best estimates (a form of point estimation used when records are not available) in compiling your initial claim, it’s important to establish good record-keeping protocols to track future R&D, both in terms of the activities undertaken and the persons involved. This not only helps to eliminate the need for estimates but helps maximise future claim values and improves the robustness of compliance which HMRC expects. Innovation Tax offer record-keeping guidance as part of every R&D claim or consultation we undertake.

Innovation Tax develop and apply a tailor-made methodology to every client claim.

Working with both SME’s and Large Companies across multiple industry sectors has helped us identify that each business is unique and that to fully optimise the value of your claim requires a tailor-made methodology to be developed and applied which fully harnesses activity and expenditure across all areas of the business.

It brings great satisfaction to see clients benefiting from claiming R&D Tax Credits, boosting on-going levels of innovation and leading to growth and even greater tax benefits in the years ahead. There is no doubt the HMRC Tax Credit Scheme is helping to keep the UK at the forefront of technological innovation.

Innovation Tax have the right team to ensure your company’s R&D claim is both MAXIMISED and ROBUST. Take a look at the profiles of our senior team and the experience they have within the sector here

HOW CAN WE HELP?

It can be challenging to submit an R&D tax credit claim to HMRC’s exacting standards. At Innovation Tax our team of experienced sector specialists, technical and quality assurance experts and tax professionals will help you identify the full extent of your qualifying activities and expenditure and work with you to ensure the correct information is included in the claim documentation, giving you peace of mind that your claim is robust, maximised and defensible.

Start the conversation with a complimentary, no-obligation discussion.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

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