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Qualifying

Often the problem is recognising that a business qualifies for R&D Tax Credits.

Our consultants have a broad business background supported by accountants well versed in the Research and Development – R&D Tax Credits scheme. We can spot areas of process and product development that our clients and their accountants have overlooked as qualifying research and development tax incentives.

The following demonstrates the typical business mind set, the under-subscribed nature of the UK market and the benefits of using a specialist practice to process the claim:

  • Concerns have been raised that the government’s research and development tax credit scheme could be failing to reach many of its target small businesses because their advisers are unaware that they qualify for research and development tax relief.
  • Several companies have been told by their accountants that they would not be able to claim, only to discover later that they were entitled to six-figure sums from HM Revenue & Customs.
  • One manufacturing business, has received £100,000 over the past five years in R&D tax credit payments, in spite of its auditors initially advising that the business did not qualify for the scheme.
  • The company, which employs 40 people, applied only after being approached by a consultancy that specialises in helping small businesses make R&D tax credit claims.
  • However, the company secretary said the accountancy firm it employs still doesn’t really understand how the business is getting the money back as it is not a normal thing for accountants to do, “it’s not being a part of their normal exercise.”
  • The manager of another company, this time a manufacturer of small electronic systems who has claimed about £35,000 under the scheme, said accountants were too passive, dealing with history, and not being proactive in trying to help companies look for ways to ensure they maximise the benefits of their expenditure.
  • Such cases are of particular concern because the accountancy profession is seen as a key player in raising awareness of R&D tax credits among small business owners, alongside chambers of commerce and Business Link offices. One senior representative of one of the accounting bodies has suggested that his members were often apprehensive about making claims, partly because of the complexity of the process. He added that in some cases accountants were told not to apply by their clients because they would rather not deal with the taxman if they could avoid it.
  •  According to the latest official figures, the number of R&D tax credit claims by small and medium-sized enterprises dropped from 5,300 to 4,870 in 2005-06. In November 2006, HMRC opened seven specialist units, employing about 60 people, to deal with company R&D tax credit claims.

Do you qualify?

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