R&D Case Study
Picking the Right R&D Tax Credit Service Provider
RDP was approached by an accounting firm, whose client was denied their R&D tax credit claim by HMRC. The claim was filed with the assistance of a 3rd party R&D tax credit service provider, who had prepared the claim.
The claim was based on the client developing a solution to make managers more effective in their jobs. While the solution was to be delivered through a software platform, research was carried out to identify the specific behaviours, skills, and competency levels that are responsible for managerial performance. Much of the description included in the R&D tax credit submission was based on research into employee behaviours, performance levels to achieve, and user acceptability of the solution. Unfortunately, social sciences are not an eligible area within the definition of R&D. Research into employee behaviour falls within social science.
However, computer science including software development is an eligible field of science. RDP reviewed the work done on building the platform and was able to identify technological uncertainties and advances in the area of algorithms, integration and scalability of the software. This development was independent of any behavioural research. In other words, the type of software development carried out could have been used in a number of applications. Which were outside of behavioural research, such as say engineering.
The claim was ultimately prepared in the correct manner by RDP and accepted by HMRC.
RDP has found many similar cases, where projects are incorrectly identified as R&D. As HMRC has substantially increased their review of R&D tax credit claims, we expect to see many more. To avoid these unfortunate situations, it is important to work with a knowledgeable and experienced professional firm.
Having over 35 years experience; filing over 10,000 R&D tax credit claims, some for the largest companies in the UK. Also being a member of the HMRC stakeholder group and having over 35 technical professionals, places RDP as a knowledge expert and value-added leader in this field.
Contact our team at RDP if you want to find out more about the Accounting Firm Case Study and how we can help your accountancy firm. To discuss further on 0208 214 1341 or email Jenni at [email protected].
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