Do you know how to defend an HMRC R&D tax credit compliance claim? Was your R&D tax credit claim prepared by a professional in the fields of engineering, science or technology?
COMPLIANCE WITH THE RESEARCH AND DEVELOPMENT TAX CREDIT SCHEME
We provide expertise to businesses involved in research and development across a range of disciplines, including science, engineering, taxation, manufacturing, healthcare and software. Thanks to their ongoing investment in knowledge creation, such businesses are eligible for Research and Development (R&D) tax credits from HMRC, reducing their corporation tax obligations and entitling them to repayments by HMRC for tax paid in previous years.
However, HMRC has recently expanded its compliance staff in an effort to limit errors and combat fraud within the R&D tax credit scheme. Consequently, more businesses are finding themselves subject to R&D tax credit compliance checks, which can lead to a penalty of up to 200% of the original claim for any business whose tax credit claim is deemed non-compliant with HMRC guidelines.
HOW WE CAN HELP YOUR BUSINESS
R&D Compliance Help Ltd provides compliance expertise to businesses across the UK. If your organisation means to submit an R&D tax credit claim, or has previously submitted R&D tax credit claims—especially if prepared in-house or by an unregulated consultant—it is important that these claims are reviewed so that any errors may be identified and appropriate action be taken.
We provide an initial (free of charge) consultation with a specialist R&D tax consultant. Following this, our team will examine your organisation’s relevant documentation (including any R&D reports, if available) and provide tailored advice to help your business best navigate its R and D (R&D) tax credit compliance situation.
NUDGE LETTERS
Nudge letters are used in other areas of tax compliance, but have more recently been adopted in the context of R&D tax credit claims. A nudge letter prompts you to review your organisation’s R&D claims and then deliver a response to HMRC.
If you receive a nudge letter, you should seek advice from specialists, such as R&D Compliance Help Ltd, to ensure that your response is tailored to the circumstances to yield the best outcome for your business. A compliance review on any current claims and past submissions should be carried out and assessed by your specialist advisor before your response is delivered to HMRC.
WHAT TO DO IF YOUR ORGANISATION IS UNDERGOING A RESEARCH & DEVELOPMENT TAX CREDIT COMPLIANCE CHECK?
If you are notified of an R and D (R&D) tax credit compliance check on your business, this does not imply that your claim has been identified as incorrect or fraudulent, as it may be that your claim was randomly selected for a check. In any case, it is important to consult with experts in R&D tax credit claims to ensure that your responses to HMRC are timely and appropriately formulated to:
- maximise the likelihood of successfully defending your R&D tax credit claim;
- minimise your organisation’s exposure to needless tax, interest and penalties.
R&D Compliance Help Ltd comprises a staff of experienced business consultants with in-depth knowledge of the R&D tax credit process. Consultation with our R&D tax specialists will help ensure the optimal outcome for your business if faced with an R&D tax credit compliance check.
REVIEWING PREVIOUS R&D TAX CREDIT CLAIMS AND DISCLOSING ERRORS
If your organisation has previous R and D (R&D) tax credit claims, it is possible that these claims were not prepared appropriately. If you prepared your claim in-house without expert consultation, used a template, or hired an unregulated third-party organisation to prepare the claim for you, it is advisable that you review your claim as soon as possible. If your claim is investigated by HMRC and errors are found, you may be subject to significant financial penalties. The financial consequences of any errors in your claim will be substantially reduced, however, if these errors are identified and disclosed before their discovery by HMRC compliance officers.
R&D Compliance Help Ltd specialises in compliance with HMRC guidelines and each of our consultants draws on years of experience handling R and D (R&D) tax credit claims. If your claim contains any errors, our expert staff will identify them so that they may be voluntarily disclosed, which will significantly mitigate the risk these errors pose to your organisation. If no errors are found, we will advise you on appropriate responses in case of an HMRC R&D tax credit compliance check.
YOUR FUTURE R&D TAX CREDIT CLAIMS
In your future R and D (R&D) tax credit claims, it is important to avoid throwing up any “red flags” for HMRC’s compliance staff. A well-prepared claim is significantly less likely to be investigated than a poorly prepared one. Your claim should be clear and concise, stating all the information HMRC requires to conclude that the claim is valid.
Our team can provide expert advice, tailored to the particulars of your business and its research and development, to ensure that your future claims are correctly formulated and your potential exposure to unnecessary costs is minimised.
HMRC R&D TAX CREDIT COMPLIANCE CHECKS CAN BE EXTREMELY IN DEPTH AND TIME CONSUMING. HMRC WILL ASK THOROUGH AND PROBING QUESTIONS TO ASCERTAIN IF YOUR R&D TAX CREDIT REFUND CLAIM WAS IN LINE WITH THE GUIDELINES BEIS (CIRD 81900) AND CORPORATION TAX ACT 2009 (CTA09).
At a high level, the HMRC will want a detailed breakdown of:
- The projects for which the research and development tax claim related to, the timings of thework undertaken, the purpose of the R&D and the outcomes, benefits and goals of the R&D work.
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The costs relating to the claim broadly covering staff, software, consumables, external costs including subcontractor costs and how these aspects relate to the Research and Development tax credit refund.
If you haven’t documented the R&D projects in the correct manner (format) it may be difficult for you to defend your tax credit refund.
HMRC can issue fines if the R&D tax refund claim is found to be incorrect, in addition to the repayment of refunds issued and interest applied.
Why talk to R&D Compliance Help Limited?
Even if your initial R and D (R&D) tax credits claim was prepared internally or through a third-party consultant or accountant, we can offer a free of charge, no obligation review of your R&D tax claim submission, together with the R&D report you submitted to HMRC.
Following our initial review, we will discuss the options open to you.
If you wish us to assist further, we only charge on an hourly basis for the support we provide and not as a % of the tax credit claim in question. We will work with you and HMRC to resolve or mitigate your claim with HMRC.