Putting in an R&D tax claim can mean a great deal to your business.
The average size of a claim we secure on behalf of our clients is over £35k, so you can see the importance of getting the paperwork in order with the tax man.
The HMRC are always looking to collect as much tax as possible.
With R&D tax claims, they want to ensure that all of their questions are answered fully.
With this in mind, you should ensure that all of your forms that accompany your R&D tax claim are in order. Here are the questions that the tax man asks and how you should make them part of your application –
Now this question might sound like a technical question, but it doesn’t have to be. The image of research and development might be one that appears to be purely scientific as in laboratory, white coats and test tubes. But advances come in all industries and in a wide range of projects. The onus is on you as the business owner to explain how your claim qualifies. This does hold back a lot of applications.
Being an innovation is a big stride in the right section with this but doesn’t provide all of the answers the HMRC wants. You need to explain to them in convincing terms that the project in your business has a technological or scientific element to be accepted and paid. We are here to help you with this part of your claim, so speak to our team today and find out how we can help.
A project to be part of a successful R&D tax claim needs to have explored the uncertain. If the knowledge is already out there, then the uncertainty doesn’t exist. It will likely be something that can be achieved but hasn’t been yet.
For example, if government legislation comes in that requires a manufacturer to change a process, then they will have to test, try a few different solutions and come up with an answer. This happens all of the time and demonstrates the uncertainty in the project.
If you have something along these lines, then the good news is that you will almost certainly have an R&D tax claim on your hands. The even better news is that if you haven’t made a claim in the last 2 tax years then we can look back over this time too. This can make your first claim a lucrative one.
This is at the crux of a claim. Analysing a problem and working towards a solution is what R&D is all about. This is the activity part of the project. And did you know that a project that fails can also be the subject of an R&D claim? Your commercial risk in trying something new is what all of this is about.
As with all things the government does, there is a significant amount of paperwork to back it up. You can check out the HMRC Charter here to see how they operate. You can find out how they deal with a claim. Alternatively, you can use someone who is an expert in this field. We have been submitting R&D tax claims on behalf of our clients for years and have secured millions of pounds for our clients. If you want to find out more then get in touch.
This part can often be missed out when submitting a claim. As part of the required information, you should take this just as seriously as all of the other parts of your submission. There are many reasons that this can be true, such as –
Others have tried and failed to overcome this
Others have solved this, but the information is publicly available
And this can form part of the explanation to the tax man in order to support your claim. The evidence in this part of your submission doesn’t have to be lengthy but needs to be persuasive. It would be a real shame to go through all of this hard work only to see your claim denied.
By Lumo Tax