So, how do you make sure that you are doing it right?
HMRC. The very mention often strikes fear into the heart of business owners; dealings with HMRC usually end up in them taking money in some form of tax or another. So the reluctance of many to enter into HMRC’s R&D tax credit scheme is understandable, it’s not often that HMRC will give a company money, so many feel that it’s just too good to be true!
Amazingly, it is true. HMRC set up the R&D tax credit scheme in 2000 to foster innovation in UK companies and to develop growth in the UK economy (they’ve got to get something out of it!). The scheme rewards companies carrying out R&D with tax credits determined by the amount of money spent on research. But we’re talking about HMRC, there must be a catch right? Not exactly, if your company is carrying out R&D in any area from biotechnology to manufacturing, or IT to engineering, then they will happily provide you with the tax credits you are due. But (of course there’s a but!), they do require an accurate breakdown of your spending on R&D and a detailed description of the advance you are attempting to make. And of course, being HMRC, they want it done right and will pick up on anything they aren’t sure about - enquiries do happen, which no one really wants!
The R&D tax credit legislation is long and complicated with constantly revised interpretations (HMRC all over!) and first-timers can find themselves making mistakes like under-claiming and losing money, and believe me, HMRC won’t correct you on this! Or over-claiming, where HMRC will put you right and may well want to investigate your claim. The best way to get it right is to get help from the experts. We’re not scared of HMRC and can help you get over your fear by introducing you to the wonderful world of R&D tax credits!
