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R&D tax credits – top 10 questions to ask your advisor.

By 10th February 2014No Comments

Who does R&D? Rocket scientists? Nuclear physicists? Creators of the Theory of Relativity?

Probably, but it is by no means restricted to companies carrying out these types of projects.

Firms that improve the manufacture of existing products, design & develop new ones, change the way they are made and/or improve processes can often be eligible. Don’t think R&D is restricted to people in white coats and wild hair; you may be doing “R&D” without knowing it – and as a result missing out on some very generous tax relief.

If you are developing or improving products and your projects have some technical uncertainty and advancement, it’s well worth seeking specialist advice. The advancement could be anywhere in the value chain, from raw materials through to waste, or indeed to your processes.

Getting the right advice to maximise a claim is vital. There are complex rules, guidance that is open to interpretation and although it is a tax scheme, being able to understand, translate and articulate the technical advances and challenges to HMRC, is key. And then the are the regional variations. Only recently, HMRC’s R&D Consultative Committee minuted that one of the problems with R&D is that there is an inconstancy across the various HMRC R&D units.

So here are 10 questions to ask to assess who’s best to help you maximise your R&D tax relief claim:

  • Do they have dealings, on a daily basis, across all R&D units
  • Do they know each unit and therefore know how to treat each office in respect to their own processes and the way different R&D inspectors interpret the regulation.
  • Do they have a central office handling all claims, to facilitate knowledge sharing.
  • How many technical analysts do they employ. Don’t be fooled into thinking that “links with universities” is any substitute, as some providers claim.  Ask for evidence.
  • What are the deliverables for a claim, and what will they expect you to do?
  • Who does what during the process? Is it all completed by one individual or do they have specialists involved at each stage?
  • How many claims have they made, what is their success rate?
  • What % of their claims have been audited by HMRC and what is the success rate for defending these (be careful as some include a reduced claim as a success).
  • What do their fees include and not include?
  • Will they conduct the technical meeting face to face or via the telephone?

If you would like to discuss your eligibility to make an R&D Tax Credits claim please contact us.  We work with Jumpstart, the UK’s leading R&D tax specialist, and complete the initial assessment without obligation.