When it comes to the HMRC R&D Tax Scheme your choice of advisor could be costly
£4.3bn Has Been ‘Paid Out’ to Companies Using HMRC’s R&D Scheme
You might be surprised to learn that the Government wants to encourage businesses to take on the risks involved in innovating their services and products to meet the needs of their clients.
It’s part of the drive to make the UK more competitive globally and HMRC is happy to cut your tax bill or pay you cash if you can satisfy their technical requirements. More than 42,000 SME’s took advantage of the R&D Tax Credit scheme in the last HMRC reporting year.
Less Than 1% of Construction SME’s are Taking Advantage of This
Less than 1% of SME’s in the broad construction sector (around 1,800 companies) are claiming R&D tax credits and given that construction represents around 7% of GDP and that there are more than 250,000 construction SME’s this seems too low.
“I’m Sure My Advisor Has This Covered”
“My advisor has this covered” can often disguise risky, poor quality claims, significant underclaiming or no claim at all. It’s hard to believe that the 18% of all the SMEs who claim are spending less than £10,000 annually on R&D.
Nervousness about what qualifies and the risk from HMRC’s quality drive could be at the core of this. Given the rise in spurious and misleading marketing this is understandable.
R&D Scheme Rules Can Create Concern
There must be rules to protect us all as taxpayers. The HMRC tests around what activity qualifies are covered by simple phrases: “attempting to resolve a scientific or technological uncertainty” is a good example of that. It’s likely that only someone who is an experienced industry expert who understands whether HMRC’s ever more stringent needs will be met can judge if a company’s activity meets that test.
What qualified as a technological uncertainty last year is unlikely to be an uncertainty this year. Often a very conservative claim can be the result in the case of DIY claims and on claims not driven by a specialist technical examination.
Experts Choose Experts
48.3 Scaffold Design were introduced through a company in their sector who had also been claiming successfully using a robust claim process.
“It was very difficult to demystify the HMRCs rules around qualifying activities says Ben Beaumont Managing Director. MPA’s analyst in this sector, Linda Tomkins, went through our projects and was able to extract the activities that would qualify. Due to the technical nature of our work we needed this expertise and experience to ensure we were claiming in the way required by HMRC.
“48.3 are undertaking new projects that are pushing the boundaries in the Scaffold sector and developing new solutions. 48.3 is all about distinction; distinction through service quality, differentiating through continuous improvement.
“Working with a company with the same values as ourselves at MPA has made the claim process easier. Because of the quality of service and expertise they have provided, I have recommended MPA to many other companies who are now successfully claiming.”
Choose Your Advisor Wisely
Ethics and Standards
A high-quality advisor can make a significant difference to reducing risk and maximising value. Make sure your advisor is bound to professional ethical standards. MPA is a member of the Association of Chartered Certified Accountants (ACCA), the world’s largest globally recognised professional body.
The tax rules change and are updated regularly. To be certain of the treatment of qualifying costs for externally provided workers, consumables or software, for example, needs professionally certified expertise. MPA’s ACCA qualified staff give you assurance of the highest standards.
Industry Insight and Expertise
Knowing the tax rule detail is important but to make a quality compliant claim technical knowledge of the industry is essential to passing the “why is this an advance in science or technology” test.
At MPA their technical experts are the core of the firm. Post graduate academic qualifications, coupled with industry experience make the MPA claim process easier for their clients and the claims robustly compliant for HMRC. For example, Stuart Bentley, a Delivery Manager at MPA, graduated from Brunel University in Material sciences and followed this with a PhD at Birmingham University.
Customer Endorsement Speaks for Itself
“In trying to design a system that meets all the criteria specified by the client, we overcome many uncertainties in developing a solution. MPA were able to use their knowledge of the sector to identify the projects that would be claimable through the scheme.” Ben Beaumont, Managing Director 48.3 Scaffold Design
Advice at No Cost
If you’re not claiming, MPA provide a no cost or obligation discovery meeting where they can identify the scope of your opportunity. If you’re already claiming, MPA offer a no cost benchmarking meeting where you can understand both risks and opportunities with your current claim.
