Claiming R&D tax relief is a complex business requiring a broad range of knowledge and understand, not only of industry challenges, but of HMRC's comprehensive guidelines.
Whilst most companies have the first part covered - a thorough understanding of what they do - many doubt their own eligibility or can be put off by HMRC's continually changing interpretation of the guidelines.
Uncertainty and doubt are preventing too many eligible businesses in the North East of Scotland from getting a financial helping hand - perhaps now is the time to ask yourself, could you be one of them?
Why does the R&D tax relief scheme exist?
Money back from the government for just doing your job? Really? If your job involves R&D then, yes, it could be true! Economic studies carried out in the 1990's showed a direct correlation between R&D and the growth of gross domestic product (GDP). This prompted a governmental need to drive innovation in the UK companies and HMRC's R&D tax relief scheme was set up in 2000 to do just that.
What is HMRC's definition of R&D?
You might think R&D is only carried out in laboratories by people in white coats but you'd be wrong, R&D can be found everywhere. If you are carrying out a project that aims to make an overall advance (whether the project is successful or not) in your company's area of expertise - from biotechnology and boiler making to software development and textile manufacturing - then these is a good chance that you are doing what HMRC defines as R&D without even realising it.
Understanding HMRC's guidelines
HMRC's guidelines for R&D tax relief are extensive, but not always clear! It can take a fair bit of effort to pick through the terminology and understand how HMRC define eligible projects, especially as these definitions are constantly refined. Do you know the difference between a technological uncertainty and a technological unknown? Or how process improvement is viewed by HMRC? Or how to claim for subcontracted work? The answers to these seemingly innocuous questions can mean the difference between an eligible and an ineligible project.
A new approach
Tempting though the potential prize may be, for the uninitiated actually knuckling down to prepare their R&D tax relief claim is anything but. HMRC's guidance, which runs to several hundred pages, puts many companies off going it alone while most accountants do not have the technical knowledge needed to comprehensively advise their clients. R&D tax relief straddles the worlds of technology and finance, and whilst technologists with strong industry knowledge are the experts at finding and documenting eligible projects and activities. That's why many companies are now turning to R&D tax relief experts, like Jumpstart, for a helping hand in putting together their claims.
An overview of the scheme
You may be surprised by the R&D that we, at Jumpstart, have already uncovered for companies in a range of sectors - meaning a nice little helping hand in the form of R&D tax relief and it's high time more companies in the North East of Scotland got in on the act.
