5 top tips for finding out
As part of our series 5 Top Tips from the Experts, Johno Harris from Aspen Waite provides his tips on how to find out if you could have a good claim.
In this blog, Johno outlines:
• Who can apply
• What could be R and D activity
• How your USP’s can indicate R and D activity
• The importance of your records
• The value of engaging a specialist
Over to Johno (Thank you – some good points!)
So many people tell me they don’t do R&D activities but once I start chatting to them, it turns out most of them do and therefore most of them have R&D Tax Credits to claim.
5 Top Tips to see if you could have a claim:
1. Are you a Registered Company?
Because R&D Tax Credits are a part of the Corporation Tax, a company must be Incorporated with Company’s house. It is worth noting that the following are not registered for corporation tax so therefore cannot make an R&D claim - sole proprietors, LLP’s, some Partnerships, most Charities if they do not have a commercial arm.
2. Do you Have Customers and are you Growing?
If “Yes” - then chances are you will have some sort of R&D Activities going on - either internally (to improve your business processes and systems) or externally - products or services you provide for your clients. Generally, whenever a client asks you for something which is not standard and relies on your skill and expertise, that is R&D activity.
3. What is your USP?
Why do your customers use you and rate you? What is it that you can do that your competitors can’t? Ask yourself these questions again, think back over the last 2 years, who was your most ecstatic client and why…… this could form the basis of an R&D Project you could claim for.
4. It’s Well Worth Keeping Records.
Always worth recording time spent on any qualifying R&D activities because that way you can claim accurately and HMRC will love you. Any time you or your team spend in meetings, on the phone or even just thinking about a new product or service may be claimable.
That said, it is worth noting you can also claim against sub-contractors who may be doing something specific for you regarding the new product or service.
You can often claim R&D Tax Credits on an annual basis!
5. Use a Specialist
You could make a claim yourself or maybe your accountant could do it for you, however, keep in mind you will need to be able to work out the numbers and follow HMRC rules plus accompanying every claim you will need to provide a detailed technical report to substantiate the claim and answer any questions HMRC may have.
Specialist companies employ highly qualified people who do this all day and most of them charge on a win only basis (usually a %age of the claim).
Claims can go back as far as 2 years
Finally, it is worth noting the UK has the most generous R&D Tax Credit system in the world and companies can claim back 2 years retrospectively and even if they made losses they can still get cash-back from HMRC in many instances.
Your Next Step
What are you waiting for! There could be tax credits and lump sum payments waiting to be claimed by you.