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Claiming R&D Tax Credits is a bit of a minefield. So to make building an optimised R&D Tax Credits claim simpler, the Myriad team has designed our easy five-step guide.
Latest government R&D statistics show the estimated total amount of R&D tax relief support claimed for the year ending March 2020 is £7.4 billion. This up by 19% from the previous year; is your company missing out?
Claiming Research and Development (R&D) Tax Credits is a two-part challenge for most small and medium-sized enterprises. The first part of the challenge is to show HMRC in detail exactly what your company has spent on R&D activities. Yes, this is about knowing exactly which costs are eligible and which aren’t. And when you consider that every R&D project is different, is no mean feat.
The second (and even trickier) part of the challenge is to show HMRC that the work your company has been doing meets all the strict criteria for R&D. HMRC’s inspectors don’t have time to study and understand the technology used in your industry, so they need to be told what you’ve done and why it is significant. They need to know about your projects accurately and precisely, in language that is clear and easy to follow.
It’s all a bit of a minefield. So to make building an optimised R&D Tax Credits claim simpler, the Myriad team has designed our easy five-step guide.
Invite your key technical and finance experts, and sit down with one of our technical experts to identify all eligible development projects undertaken in the accounting period(s) for which you are claiming. For each project, you will need to establish the start and finish date (if it has finished!) and it’s at this stage that we’ll soon be able to tell you whether your claim definitely hold water.
HMRC highly recommends that you include a technical briefing (also known as a technical report) for your major projects when filing an R&D tax relief claim. We suggest that technical reports are completed to cover approximately 60% of your development costs. Therefore, it makes sense to prepare a technical briefing for projects that are high on the development time front.
It is important that your briefing focuses on highlighting the eligible activities within the Department of Business, Innovation and Skills (BIS) guidelines. Again, the technical briefing will be drafted by one of our R&D tax relief specialists to ensure the claim meets the qualification criteria.
Your company’s R&D relief claim will need to be supported by a costing schedule that allocates eligible costs to each qualifying development project. Again, by working with specialist R&D tax relief experts like us, you know your costing schedule is correctly prepared and that your claim is optimised. You can claim the following ‘revenue’ expenditure which is actively and directly related to the eligible development projects:
A full R&D tax relief claim will need to be prepared including technical briefings and costing schedules. You will need to update the company tax return (CT600) and tax computations, something which can be completed by your R&D tax specialist or accountants.
If you are making a retrospective claim, then the company tax return (CT600) and tax computations will need to be amended and resubmitted together with the R&D tax relief claim. The R&D tax relief claim, together with the company tax return, tax computations and the statutory accounts will be reviewed by one of the seven regional HMRC R&D Tax Units.
The relevant HMRC R&D Tax Unit will process your R&D tax relief claim by reviewing your technical report, checking your costing schedule and company tax return/tax computations. If your company is due a corporation tax refund or a credit payable, then the payment is normally made within 1 to 2 weeks once the claim has been processed. If HMRC decides to make an enquiry into the R&D tax relief claim, this is normally communicated within 30 days of receiving the claim. However, HMRC does have up to 12 months to make to make an enquiry into a company tax return.
Find out more about HMRC enquiries in our recent blog, HMRC enquiries into R&D Tax Credits: How to avoid them.
Our 5-step R&D tax claims process is simplicity in itself so you’ll always know where we are with your claim. Plus, our specialist knowledge and experience means you can be sure of a robust and technical R&D tax credits claim.
The Myriad team will handle your R&D tax credits claim from start to finish. We make sure your project qualifies by undertaking a thorough technical analysis of your R&D project and ensuring it qualifies under HMRC's strict criteria. Our cost accountants then identify all eligible expenditure ensuring no costs are over or under claimed.
“I would recommend Myriad without any hesitation at all. My experience with them has been excellent.” - Chris Stanford CEO, Arden Biotechnology.
No matter which sector your company is in - or what size it is - if it has undertaken any R&D work that sought to advance science of technology recently then R&D Tax Credits could be an option for your business.
If you would like to know anything more about how R&D Tax Credits can benefit your company, or you’d like to start your claim, feel free to call our experts now on 0207 118 6045. Alternatively you can drop us a message and we'll ring you back.