There are a number of steps HMRC is taking to ensure companies are filing proper R&D tax credit claims. This ranges from preventing fraudulent claims to companies pushing boundaries as to what constitutes eligible R&D work.
All claims to the R&D reliefs — either for a deduction or a tax credit — will in future have to be made digitally. (Except from those companies exempt from the requirement to deliver a Company Tax Return online)
How to claim R&D Tax Credit
These digital claims will have to break the costs down across qualifying categories and provide a brief description of the R&D. Each claim will need to be endorsed by a named senior officer of the company. In addition if the company uses an agent, the agent’s name will have to be disclosed.
This will provide HMRC with greater ability to review R&D tax credit claims submitted, and select those claims for review that contain information that trigger concern. It will be very important for companies to deal with qualified, professional and experienced R&D tax credit providers.
Registering R&D Claims
Companies that have not filed an R&D tax credit claim in the past 3 years will need to inform HMRC, in advance, that they plan to make a claim. They will need to do this, using a digital service. But within 6 months of the end of the period to which the claim relates.
So this means that first time claimants and companies that have not filed a claim the past 3 years will have to register their claim through a HMRC portal.
Given this must be done within 6 months of year end or tax period, it will be important that clients are aware of this deadline.
Following the review of R&D tax reliefs launched at Budget 2021, the government announced the above measures will apply for accounting periods beginning on or after 1 April 2023.
Advising our clients of how HMRC are tackling abuse and improving compliance
RDP Associates anticipated these changes well in advance. We have been through these types of situations in other countries. We see the UK repeating the re-action to the programme needing implementation of control and anti-abuse procedures
So, if you are concerned about your R&D tax credit claims. Or concerned your provider isn’t being reactive to current changes within the system, speak to RDP Associates today.
RDP has prepared over 10,000 R&D tax credit claims. We also have 35 technical staff. Which range from software specialists, engineering and scientists in physics, chemistry, and life sciences. We have prepared the R&D tax credit claims for some of the largest financial institutions, manufacturing, and construction companies in the UK, as well as small start-up companies, and everything in between.
RDP’s unique R&D tax credit process; the Innovation Connection Programme (ICP)
We are very proud of our proprietary ICP programme which is the foundation of our R&D tax credit services. The objectives of our ICP process are to.
- Ensure the client is 100% confident that all eligible R&D projects, activities, and costs are claimed
- Ensure the company spends minimal time on the claim process
- Ensure the claim can withstand any HMRC query
- Implement a process to identify and capture R&D work in real time, effortlessly
So, to find out more about how HMRC is tackling abuse and improving compliance and how to claim R&D Tax Credit please contact get in touch with us here.