Navigating the Turbulent R&D Landscape
YesTax is passionate about working closely with its accountancy partners, and engages with accountants throughout the UK. Having spent over a decade building a specialist tax services business, we’re expert in our market. We have an intimate understanding of HMRC’s application and interpretation of tax legislation in the fields in which we specialise. Given HMRCs renewed approach and welcome measures to tackle abuse, it’s never been more important to work closely with our proactive, like-minded accountants. It’s what we love to do, and in our opinion, is the only way to work.
The legacy
Where qualifying activity is taking place, the UK government encourages businesses to access valuable tax reliefs and incentives, but over the years the influx of unqualified advisors offering unscrupulous advice and the volume of companies now claiming, means there’s never been more pressure on accountants to spot every possible tax credit opportunity.
In an unregulated sector, the R&D tax relief industry has experienced a huge cold-calling culture which in turn has led to a significant increase in the number of poorly assembled claims. Poor advice in this sector is now widespread. As a result, concern over abuse and boundary pushing has grown with HMRC investing additional resource to scrutinise claims far more closely than ever before. Poorly assembled claims mean claimant companies may become exposed to significant tax risks, including long and protracted enquiries which may result in substantial repayments of tax. On top of this HMRC has the power to impose significant penalties of up to 100% of the underpaid tax.
It’s for these reasons client protection features highly on the YesTax agenda. We’re working closely with our accountancy partners to ensure clients are well looked after, and the risk of enquiry is kept to a minimum.
The shift
HMRC’s response to reduce fraud and error has seen the introduction of a number of legislative and regulatory changes to place some restriction on claims being made in the sector; including:
1. The PAYE/NI Cap
From 1 April 2021 the cap will limit the amount of payable R&D tax credit to an SME to £20,000 plus 300% of its total PAYE and NIC liability. The cap only relates to companies claiming under the SME scheme and which are surrendering tax losses for the payable 14.5% credit.
2. R&D Expenditure Incurred Overseas
Where claimant companies utilise labour from third parties which are located overseas, they will, from April 2023, only be able to include that expenditure where the work is performed from within the UK.
3. Compliance
From April 2023, companies must inform HMRC, in advance, that they plan to make an R&D claim. They will need to do this, using a digital service, within 6 months of the end of the period to which the claim relates.
Also from April 2023, supportive documentation outlining the advance in technology sought, and the technological uncertainties overcome, will be a statutory requirement. Whilst this has always been regarded best practice, it hasn’t previously been a statutory requirement.
YesTax has made its position clear with regards to recent abuses of the R&D tax credit scheme, but it also acknowledges that genuine claimants should not fall foul of the new rules when looking to claim this valuable relief. Working alongside our accountancy partners means we’re well-placed to navigate these changes for clients. Planning a company’s structure to mitigate the risks relating to these changes is more important than ever. We don’t act as an external, third-party provider charging for billable time, our accountancy partners pick up the phone to us just as they would to a colleague in their own office.
We help with technical queries big and small. We speak with clients, qualifying or not. We raise and promote awareness; hosting client drop-in clinics, conducting qualification calls and delivering technical training sessions to staff. We review erroneous claims compiled by third parties.
Accessing free, professional, hands-on expertise in this way means clients receive best-in-class advice enabling their development work to thrive, and assisting our partners in securing impressive rates of client retention.
But don’t just take our word for it:
“I just wanted to put on record what a pleasure it was to meet with you all - I would have said with every client meeting the ability to spot an opportunity would have been on my radar …now it has had been invigorated!!
All who met you that day had a whole new vision of opportunities ... and a team we can trust to work with on meeting expectations too.
We really looking forward to working together”.
SMH Joliffe Cork
The future: in partnership
Whilst we welcome HMRC’s approach, it’s imperative the invaluable incentives and reliefs are secured for genuine, eligible claimants. By working in conjunction with a client’s accountant, a deep understanding of a business is gained, which when combined with specialist technical expertise means claims are a robust, compliant, optimised in accordance with the requirements set by HMRC, and delivered seamlessly between its professional advisors.
With YesTax, YOU GAIN:
- At your fingertips, best-in-class advice and how to structure claims in the context of legislative change
- Comprehensive client base reviews to ensure no opportunities are missed
- A dedicated point of contact for hands-on technical queries, client meetings, client qualification conversations/calls
- Speakers and sponsorship to conferences or events held during the year
- Training sessions to educate the team, improve your knowledge and enhance your ability to spot opportunities
- Recurring revenue streams for work generated at no cost
- Bespoke marketing material for your social media and newsletters
- A set of bespoke industry specific brochures for marketing to specific industries and clients
- Access to our leading enquiry resolution service providing specialist support
- Topical webinar updates
- Contributions to a much wider world game, where 2.5% of revenue generated together is donated to vulnerable children both here in the UK and overseas
With widespread change, increased claim complexity and HMRC’s drive on compliance, we are pleased to hear from accountants with queries, big or small. Whether it’s assistance in the completion of a CT600L, defending an enquiry in which the accountant has not been involved, or embarking on a full-blown partnership programme – we would love to hear from you.
Please contact us: hello@yes.tax
YesTax. Positively Better.