This month we wrote an R&D case study on a large company setting up operations in the UK. Here we explain what we did at the start, right through to the end and what the result was.
Case Study – Background
A large company setting up operations in the UK contacted RDP Associates (“RDP”). The operations included a 50-person technical team developing various software platforms on which the company’s solutions could be delivered to its client base. The software development included AI and machine learning. As such, the company was interested in learning and assessing whether the UK R&D Tax Credit programme was suitable for them.
Approach
RDP started the process by having a workshop session directed at the specific R&D work the company was to undertake. During this workshop, RDP covered the R&D Tax Credit eligibility criteria by using examples of eligible R&D projects in the company’s industry in order to give the key technical team an idea of what qualifies as R&D. RDP then went through an assessment of proposed R&D projects to be carried out by the company. Then identified which of those projects met the definition of R&D within the R&D Tax Credit programme.
RDP then reviewed the Company’s processes to develop and build the software platforms. It was determined that some of the processes and related documentation could be gathered by RDP to prepare the R&D Tax Credit report and claim. However, not all the information required to prepare the R&D Tax Credit report would be generated by the company’s processes. Therefore RDP added to the process some simple templates that adjoined existing documentation processes that the company was currently using. This made it very easy for technical staff to add in the required information.
RDP subsequently made quarterly check-ins with the technical team to review the documentation, answer any questions the staff had, and generally ensure all R&D work was being captured in real-time.
At year-end RDP helps in many areas
At year-end, RDP prepared the Additional Information Form as part of the R&D Tax Credit filing process. Which included a description of the R&D projects and how each project met the R&D tax credit criteria. RDP also prepared a detailed R&D cost summary that identified all eligible R&D costs related to the R&D project. The information from this cost summary was used to input the required information on filing the R&D tax credit claim with the company’s corporate tax return.
One key aspect of the R&D Tax Credit claim process was that RDP reviewed a final draft of the R&D Tax Credit claim. This is with the company’s key technical and financial staff prior to filing.
To facilitate this review, RDP used as a guide our “Maximiser Checklist”. This checklist runs through the R&D Tax Credit claim to ensure all eligible projects, activities and costs are being claimed. Here, we also pointed out what was – and was not – claimed, so that the company was 100% confident that all R&D projects, activities and costs were included. This ensures the R&D Tax Credit claim was maximised and no stone was left unturned. Also, as noted above, R&D documentation was recorded and reviewed quarterly by RDP. The documentation would then provide excellent evidence of R&D work carried out and result in a quick and efficient response to any compliance check carried out by HMRC.
Result
Using/implementing our ICP method, the R&D Tax Credit claim was filed on time with the corporate tax return. The company received its substantial instalment refund within 2 months of filing.
If you have any questions regarding this R&D case study or any a question about a potential R&D claim. Then please contact 0208 214 1341 or [email protected]k to discuss further.