HMRC has begun to take tough action against those suspected of making fraudulent Research & Development (R&D) tax claims, sending thousands of letters to taxpayers accusing them of dishonest activity.
What is R&D?
R&D (Research & Development) is a collective term for innovative projects or activities that aim to develop new products, services, processes, or enhance existing ones within a business.
It is generally linked with innovation and the ultimate goal of R&D in a business is to improve profitability.
For many companies, R&D is essential for gaining and maintaining a competitive advantage in their industry by facilitating better products and processes. By developing a new product or service, or a unique and innovative approach to an existing one, a business can move ahead of its direct competitors.
You may be able to claim Corporation Tax relief if your project meets the government’s definition of R&D.
Are HMRC cracking down on suspected fraud?
It can be seen that there are a number of issues with R&D claims, despite their helpfulness to a business.
Sometimes rogue consultancy firms have been seen to encourage some companies to make R&D claims which do not always stand up to scrutiny. Naturally, HMRC should be questioning these claims and perhaps pursue the unscrupulous firms that encourage businesses to make them.
However, many who have received the letters and their advisers are convinced that there is no fraudulent intent and while there may be the occasional calculation error, the claims themselves are valid.
As it appears that HMRC is coming down hard on suspected fraud, it is clear that when considering claiming R&D relief, you should be absolutely sure your business is entitled to the relief and there are no errors in your application. Lest you may fall victim to a threatening letter from HMRC which could cause undue worry and concern.
Let Williamson & Croft help
If you’re planning to embark on an R&D project, Williamson & Croft can assist with claiming the associated tax relief.
The relief for SMEs is currently 230%. That means that for every £1 of qualifying expenditure your company makes, it should receive an additional £1.30 of relief, providing your company is fully eligible for the relief.
Our dedicated tax team are fully equipped to provide specialist tax advice and support clients through events such as R&D claims.
Our advice is clear and concise, and we manage the entire process of the tax relief claim to remove any stress or risks involved.
If completing an R&D tax claim for your business is something you would be interested in, contact us today. We will ensure you get the best and safest result managed by our expert team at every step of the way.
As always, if you would like any further information regarding the above, please feel free to contact our offices by email firstname.lastname@example.org.