R&D Tax Relief Fake News
When it comes to R&D tax relief, at ABGI UK we hear a lot of fake news, and we don’t like it. R&D tax fake news can misinform eligible businesses, leading them to wrongly believe that R&D tax credits aren’t for them.
19 January 2018
No one had heard about "Fake news" until last year, when Donald Trump shouted “you are fake news!” at a reporter during a press conference. Since then, usage of the phrase has increased so fast (365% in a year!) that the term was named 2017's word of the year by Collins Dictionary.
When it comes to R&D tax relief, at ABGI we hear a lot of fake news, and we don’t like it. R&D tax fake news can misinform eligible businesses, leading them to wrongly believe that R&D tax credits aren’t for them.
So it’s time to venture forward and stop the spread of misinformation!
1 - You can only claim R&D tax relief if you wear a white coat and work in a laboratory.
FAKE NEWS! Any limited company from any sector can be eligible for R&D tax credits - from biotechnology (where there are actually lab coats) to manufacturing; IT to food and drink; engineering to renewable energy (plus all the other sectors we haven’t mentioned!). As long as you are working towards an advance in your field and facing uncertainty in how to do it you could very well be doing R&D.
2 - You can only claim R&D tax relief for successful projects.
FAKE NEWS! You can claim R&D tax credits for any eligible R&D project whether there was a successful outcome or not. In fact failure can be a good sign of eligibility - what can be more uncertain than a seemingly impossible project?
3 - You can only claim for your current financial year.
FAKE NEWS! You can make a retrospective claim up to 2 years from your current financial year end, which means companies new to the scheme can still go back and claim for older projects rather than missing out.
4 - You can’t claim R&D tax relief if you have received a grant.
FAKE NEWS! Whilst it is true that some grants can complicate an R&D tax relief claim, it is still possible to make a claim no matter what other funding you have received
5 - You can’t claim if you are subcontracted to do work by another company.
FAKE NEWS! Subcontracting can be a tricky situation in an R&D tax credit claim, but it doesn’t necessarily mean you can’t claim. You need to be very sure about your contractual situation, the work you are contracted to do and who is bearing the brunt of the cost, as all these can have an effect on the eligibility of subcontracted work.
6 - HMRC doesn’t investigate R&D tax relief claims.
FAKE NEWS! HMRC is cracking down on R&D tax relief claims. They made it clear that their top priority is to ensure that R&D tax relief claims are accurate and compliant. Figures suggest that 1 in 4 R&D claims are now being challenged. If your claim is not accurate, you could lose thousands in relief or face the inconvenience of an HMRC enquiry or the pain of substantial penalties. HMRC Inspectors might even pay you a visit and your past and future tax claims could all be scrutinised too.
6 - Claiming R&D tax credits is hard.
FAKE NEWS! Ok, more of a Fake-ish News! It’s a complicated process that requires knowledge of your technology (easy for you!) but also an in depth knowledge of HMRC’s R&D tax credit legislation (not so easy!). But you can cut out the difficult part by enlisting the help of an R&D tax credit expert who can take on the hard work and complications for you.
As the UK’s leading R&D tax relief claim specialist, ABGI delivers the best results. And that’s not only to do with claim size. ABGI UK is also known for the robustness and accuracy of our claims. We maintain an excellent reputation with HMRC, who see us as experienced, knowledgeable and reliable when writing effective narratives for R&D tax relief claims. Don’t risk it. Working together with ABGI UK could make a big difference to the accuracy and value of your claim!
To arrange a free consultation to discuss your own R&D tax relief specific circumstances, to identify how we can work with your team to improve the claim process and realise greater value for your business, contact the ABGI team on 0203 984 0321 or firstname.lastname@example.org.