You and your team have spent a great deal of time compiling and submitting your claim for R&D Tax Credits. You’ve dotted the I’s and crossed the T’s - or have you?
The application process for R&D tax relief is notoriously tricky, and mistakes can happen that can lead to an HMRC enquiry. At the time, these can seem incredibly daunting, but with the right action – and the best professional advice – there shouldn’t be a need to worry.
Here we take a look at what HMRC enquiries are, how to minimise the risk of an enquiry taking place, and how Myriad Associates can help.
Launched by the UK government in the year 2000, the R&D Tax Credit scheme is a tax incentive designed to encourage and reward innovation in business. HMRC administers and manages the scheme - and sometimes claims may involve an enquiry.
R&D Tax Credit claims that have been submitted to HMRC are usually dealt with very promptly – the guideline is within 28 days. In the majority of cases, claims are reviewed alongside the relevant documentation and this alone is enough for HMRC to give a claim the green light. However, sometimes HMRC will ask for additional information to gain clarification on anything that it deems to be unclear. This process is what’s referred to as an enquiry.
Government funds are limited and enquiries are part of HMRC’s efforts in making sure they distribute these funds fairly and responsibility. As a matter of course, HMRC also opens enquiries into a percentage of all R&D Tax Credit claims simply to test that their own policies and procedures work. Recent changes in HMRC’s approach to R&D Tax Credits have also given rise to more enquiries, again by way of checks and balances.
The reasons behind HMRC opening enquiries can vary massively. It could be something to do with your company’s set up, your documentation or a change in your circumstances for instance - or something completely different.
HMRC may also have some questions about the type of R&D work your company has undertaken, perhaps around the technology you use or the industry you work in.
Below are some of the most common reasons why HMRC may wish to open an enquiry:
This is why at Myriad Associates we take putting together your R&D Tax Credit claim seriously. We understand that HMRC enquiries can be stressful (not to mention costly) so we make sure your application is as well presented and thorough as it can be. This means that right from the beginning, you can submit your claim confident in the knowledge that an HMRC enquiry about anything specific to you is highly unlikely.
HMRC insists that all R&D Tax Credit claims are well-prepared. All questions should be answered fully and accurately and all requested supporting documentation supplied. This gives claims the best chance of standing up to scrutiny and being paid without any further questions. To maximise your claim, you also need to include a high-quality narrative and robust methodology which also helps protect against enquiries, penalties or reductions.
HMRC reserves the right to impose penalties of up to 100% of your claim’s value if it deems your preparation process to have been negligent. A helpful attitude and proactive cooperation during an enquiry is highly recommended in order to achieve the outcome you want.
At Myriad Associates we take the stress out of applying for R&D tax relief by making the whole process simple. Our team consists of a range of R&D tax specialists who will take the time to understand the mechanics of your business, your general tax affairs and your R&D work. We can then work together with you to prepare your claim effectively. This means that our clients can be assured that their claims are robust enough to stand up to HMRC’s closest scrutiny before their claim is submitted.
If your claim has become subject to an HMRC enquiry, you’ll need a team of R&D experts on your side. Myriad Associates can advise you on all issues surrounding your enquiry, and guide you through the process in order to arrive at a mutually acceptable outcome.
We have many years’ experience in dealing solely with R&D tax relief claims and we’re incredibly effective at it.
We will help you by:
If you’ve been contacted by HMRC regarding your R&D Tax Credit claim, or you’d like us to support you in your application, please do get in touch using our contact form, or call our friendly team on 0207 118 6045.