R&D Tax Relief

WHAT COUNTS AS QUALIFYING R&D ACTIVITY?

HMRC’s definition of R&D is purposefully broad. Whatever size or sector, if a company is attempting to make advancements in science or technology, then it may be carrying out qualifying activity.

It is more important than ever for companies to understand and be confident that their R&D activity meets the definitions of qualifying R&D. HMRC have expanded their resources in recent years to ensure that claims are checked and interrogated.

Projects which seek to:

• Extend knowledge in a field of science or technology
• Make appreciable improvements to existing science or technology
• Duplicate the effects of existing technology but in an appreciably improved way
• Create something which improves overall capability in a field of science or technology

are likely to qualify for R&D tax relief.

Projects which involve the following are unlikely to qualify for R&D tax relief:

• Routine analysis, copying or adaptation of an existing product, process, service or material
• Commercial innovations without any advancement in the underlying science or technology
• Replicating existing technology but in a new commercial market
• Solving problems which a competent professional would deem to be readily deducible.

HOW WILL I KNOW IF I QUALIFY FOR R&D TAX RELIEF?

If you’re asking yourself this question, take comfort in the fact that there are many others asking the same question. Often, it isn’t easy to decipher whether or not an activity is qualifying. This is where a conversation with one of our experienced advisers will help. One point to note which often comes up in conversation with clients is whether simply improving the state of knowledge within the business qualifies for R&D tax relief. It’s important to note that the company has to be furthering the knowledge in the field of science or technology and not just its own knowledge.

In summer 2023, HMRC released an updated guide to R&D tax relief. The guide identified several industries where HMRC believe it is unlikely that qualifying R&D will be taking place. These industries are:

• care homes
• childcare providers
• personal trainers
• wholesalers and retailers
• pubs
• restaurants

If your company operates in one of these sectors and you have been told you will qualify for R&D tax relief, you should exercise extreme caution and seek a second opinion.

CAN I CLAIM FOR ABORTED R&D PROJECTS?

Yes. R&D doesn’t have to have been successful to qualify. The fact that a project has been aborted can be an indicator that R&D has taken place. If the project has been aborted because the technical hurdles were too high, this suggests there was uncertainty at the start of the project.

CAN I CLAIM IF I’M A SOLE TRADER?

Unfortunately, R&D tax relief is a corporation tax relief which means that business entities which are not subject to corporation tax will not be eligible to claim. Any business which is subject to income tax and not corporation tax will miss out. This means that sole traders and most partnerships will not be allowed to claim.

I KEEP HEARING CLAIMING R&D TAX RELIEF IS BECOMING MORE DIFFICULT. TELL ME MORE.

The Treasury has acknowledged that a serious problem exists within the R&D tax advisory sector. Whilst many reputable advisers in the market have been sounding the alarm for some time, HMRC and The Treasury have been somewhat reluctant to formally acknowledge the problem. However, this has now changed.

From 8th August 2023, new rules were introduced to combat fraud and abuse of the R&D tax system. These include a new statutory requirement to provide details of projects and expenditure, the requirement to notify HMRC which adviser has been used during the claims process and a requirement for some companies to pre-notify HMRC of their intention to make a claim.

In addition, HMRC has recruited additional technical resource which has resulted in a dramatic rise in the number of enquiries opened into claims. Enquiries are now longer and more involved, with the requirement to provide substantiating evidence greater than ever.

In simple terms, claiming R&D tax relief is not the quick, easy, risk-free task that many advisers have previously claimed.

WHAT ARE THE NEW RULES ABOUT SUBMITTING CLAIMS ONLINE?

From 8 August 2023 all R&D claims must be submitted via HMRC’s online Additional Information Form (AIF). Previously there has been no requirement for claimant companies to formally document the development activities. Whilst the legislation regarding qualifying activities has not changed, from 8 August 2023 when making an R&D claim the following questions will need to be answered:

1. What is the main field of science or technology?
2. What was the baseline level of science or technology that the company planned to advance?
3. What advance in that scientific or technological knowledge did the company aim to achieve?
4. The scientific or technological uncertainties that the company faced.
5. How did your project seek to overcome these uncertainties?

The AIF must be submitted before the tax return has been submitted. Other information required includes the company’s UTR, PAYE reference, VAT number and SIC code. Details of any R&D agent used and contact details for the senior officer responsible for the claim will also need to be provided.

An interesting requirement of the new Additional Information Form concerns details of the claimant company’s SIC code – this has also been a noticeable question requested by HMRC throughout the R&D enquiries we have seen recently. A requirement of the scheme is that the project must relate to a company’s trade, either an existing one or one that it intends to start up based on the results of the R&D. Furthermore, HMRC has explicitly identified sectors that rarely qualify for R&D relief, these include care homes, childcare providers, personal trainers, wholesalers and retailers, pubs and restaurants. The requirement to provide the company’s SIC code will assist with the compliance checks and play an important role going forward.

As part of our due diligence, we are now reviewing all our client SIC codes to ensure it accurately reflects the development activities being undertaken by the company.

TELL ME ABOUT HOW THE SME SCHEME WORKS

The SME scheme was introduced in 2000 and the potential tax benefits steadily increased over the years. However, from 1st April 2023, the additional rate of relief was cut to 86% from 130% representing the first ever rate reduction in the relief’s existence.

The scheme works by giving additional tax relief on qualifying R&D expenditure and as a result of this, reducing taxable profits or increasing tax losses. The current rate of extra relief on qualifying expenditure is 86% (sometimes expressed as 186% when taking account of the tax relief received on expenditure regardless of making a claim). This means that if a company spends £100,000 on qualifying R&D, an additional deduction of £86,000 is given against taxable profits. Therefore, the company receives a total deduction of £186,000 from taxable profits. The current rate of corporation tax in the UK is 25% - this means that a claim which identifies £100,000 of expenditure benefits a company by reducing its tax bill by £21,500. This is calculated as £86,000 (i.e. the extra relief given by the claim) multiplied by 25%.

When a company is in a loss making position, additional tax relief based on the amount of qualifying expenditure is given in exactly the same manner as a profitable company would receive. The extra relief serves to increase tax losses. For example, if a company has made a loss of £500,000 and identifies £100,000 of qualifying R&D expenditure, the new loss position would be £586,000. This is the extra £86,000 of relief added to the existing £500,000 loss. The company then has a number of options with this loss – carry back, carry forward or surrender to a group company. However, there is a final option called the R&D tax credit.

The R&D tax credit allows the company to ‘surrender’ some or all of the loss to HMRC, in return for a 10% payable cash credit. The amount which can be surrendered for the 10% credit is capped at the lower of the available loss (in our example, this would be £586,000) or 186% of the actual expenditure identified in the claim (in our example this would be £186,000). Therefore the company would surrender £186,000 of losses in return for a £18,600 payable cash credit (i.e. 10%). This is an extremely valuable tax benefit, especially for loss making start up companies that may be developing new technology with little initial income.

*Note that in the above examples, a corporation tax rate of 25% has been assumed. This may not be the rate of tax paid by all companies – those with profits of less than £250,000 may be subjected to a lower rate.

WHAT ARE THE NEW RULES REGARDING R&D INTENSIVE COMPANIES?

This measure introduces a higher rate of payable tax credit for loss-making R&D intensive SMEs. Companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if they meet the definition for R&D intensity, instead of the 10% credit rate for non-intensive companies. This scheme is targeted specifically at loss making R&D intensive SMEs, who will benefit from this payable credit rate change. A company is considered R&D intensive where its qualifying R&D expenditure is 40% or more of its total expenditure.

WHAT ARE THE RULES REGARDING THE PAYE/NI CAP FOR SME TAX CREDITS?

This change will affect companies that carry out R&D and claim the payable R&D tax credit for companies which are SMEs. It affects accounting periods beginning on or after 1st April 2021.

The measure limits the amount of payable R&D tax credit which an SME can claim to £20,000 plus 300% of its total Pay As You Earn (PAYE) and National Insurance Contributions (NICs) liability for the period.

A company is exempt from the cap if:

• its employees are creating, preparing to create or managing Intellectual Property (IP) and
• it does not spend more than 15% of its qualifying R&D expenditure on subcontracting R&D to, or the provision of externally provided workers (EPWs) by, connected persons

TELL ME ABOUT HOW THE RDEC SCHEME WORKS

The RDEC scheme was introduced on 1st April 2013 as an optional replacement for the older Large Company Scheme (LCS). From 1st April 2016, it became mandatory when the LCS scheme was phased out. The RDEC scheme works in a similar manner to the SME scheme in terms of qualifying costs and qualifying activity but differs in the way it offers a tax benefit. Instead of giving extra relief like the SME scheme, RDEC gives a taxable credit which reduces the corporation tax liability of the claimant company. It can also give a payable credit to loss making companies (just like the SME scheme – but the actual mechanics of how the credit is produced is different).

From 1st April 2023, the RDEC scheme increased to 20% of qualifying costs. However, companies do not receive the full 20% credit because the credit is taxable. Taxing the 20% credit at the current rate of corporation tax of 25% gives a net benefit to the company of 15%.

A key feature of the RDEC scheme is the ability to reflect the credit in the financial statements. This improves accounting performance – something which is particularly attractive the large corporates who may wish to report strong performance to keen eyed shareholders. Reflecting the credit in the financial statements is not mandatory – and our experience has shown that very few companies elect to do this. Where companies do not show the credit in the financial statements, a simple adjustment in the tax computation is required.

WILL CLAIMING R&D TAX RELIEF AFFECT MY ACCOUNTS?

For SMEs, claiming R&D tax relief will only impact on the tax charge in the accounts. Your accounts won’t look any worse for claiming R&D tax relief – in fact they will only look better due to a reduced tax liability and/or a payable tax credit. Many clients ask us if they make a claim from a previous year, how will it affect that year’s accounts? The simple answer is that it won't! The claim can be reflected in the current year’s accounts and there is no need to amend or restate previous accounts.

For companies claiming under the RDEC scheme, things can be a little different. An RDEC claim can be (but doesn’t have to be) reflected in the accounts. This is a simple adjustment which has a positive impact on accounting performance. However, most companies choose not to reflect an RDEC claim in their accounts and simply make an adjustment in the tax computation.

WHAT DO HMRC WANT TO SEE FROM AN R&D TAX CLAIM?

Prior to 8^th August 2023 there was no formal, official template when submitting an R&D tax claim to HMRC. From August 2023, it will become a statutory requirement to provide details of the projects, the claim expenditure and various other data to enable HMRC to assess the claim’s risk profile.

Our years of experience dealing with HMRC’s R&D unit has enabled us to develop a robust and reliable reporting format which provides HMRC everything they need to pass judgement on a claim. This includes a comprehensive technical report outlining the projects which meet the qualifying criteria for the relief as well as a detailed financial report which provides a breakdown of the costs included in the claim. This is on top of the information required by statute and which is submitted via HMRC’s new online ‘Additional Information Form’ (AIF).

WHAT ARE THE NEW PRE-NOTFICATION RULES FOR CLAIMS?

If you’re planning to claim Research and Development (R&D) tax relief or expenditure credit for accounting periods beginning on or after 1 April 2023, you must submit a claim notification form if:

• you’re claiming for the first time
• your last claim was made more than 3 years before the last date of the claim notification period

I DON’T KEEP SPECIAL RECORDS OF MY R&D – DOES THIS PREVENT ME FROM CLAIMING?

No. But there are a few points to note here.

There is no statutory requirement for additional records to be kept by companies who are claiming R&D tax relief. However, the requirement to keep sufficient business records for corporation tax purposes do apply. What this means in practical terms is that HMRC are relatively flexible where records are concerned. For most of our clients, it is relatively easy to extract the relevant cost and technical information using records that are kept during the normal course of business. YesTax can help you put simple and effective measures in place to ensure your R&D record keeping is in good order. We won’t ask you to implement time consuming processes – just a few things to make life easier. By doing this, you will make your claim more robust and given that R&D tax credits are extremely generous, it makes sense to put simple measures in place to make your claim accurate.

It's worth noting that although there are no statutory requirements to keep additional records for R&D claims, we are aware that HMRC are being increasingly demanding where providing evidence of qualifying projects is concerned. This is likely to continue in the future.

I AM AN SME AND HAVE RECEIVED GRANT FUNDING – CAN I STILL CLAIM R&D TAX RELIEF?

The simple answer to this question is Yes! However, it is likely to affect the scheme in which you claim under (SME or RDEC).

The interaction of grants and R&D tax relief can be complicated, but we’ve summarised the most common situations below.

I’ve received a grant which is notified state aid

Notified state aid grants are bad news for R&D tax claims. Common grants which fall under this category are Innovate UK grants (previously Smart Grants) and any grants which fall under the General Block Exemption Regulations (GBER). If you have received a notified state aid grant which is either specific to the project you want to claim R&D tax relief on or is non-specific (i.e. it covers your general R&D activity), then any claim for R&D tax relief will have to be made under the less generous RDEC scheme. However, if your grant is project specific, it’s important to note that other R&D projects which have been exclusively funded by the company will be eligible for the SME rate.

I’ve received a grant which is not a notified state aid

This situation is slightly better than the one outlined above. Common non-notified state aid grants include Horizon 20/20, FP6 or FP7 and de minimis grants. If you have received one of these grants, then the amount which has been received as funding will need to be claimed under the less generous RDEC scheme. However, any expenditure which the business itself has funded will be eligible for the SME rate of R&D tax relief. Many Horizon 20/20 grants will only fund up to 40% of the total project costs, meaning that the remaining 60% could be eligible for the generous SME rate of R&D relief.

I’ve received a grant – will this affect my claim in any other way?

Quite possibly, Yes! Many SMEs will engage subcontractors as part of their R&D project. As we have seen, when an SME receives grant funding, it often means some or all of the project must be claimed under the RDEC rules. It’s important to note that under the RDEC rules, subcontracted costs are not allowable (unless the subcontractor is an unincorporated entity of a qualifying body). This may mean that a huge chunk of the project cost becomes disallowable for R&D tax relief. It’s therefore very important to speak to us before you accept a grant – forward thinking is the key.

WHAT COSTS CAN BE CLAIMED?

HMRC have six clearly defined categories of qualifying expenditure. These are: staff costs, subcontracted R&D costs, Externally Provided Workers, consumables, software and certain energy costs. We will look at each one in more detail.

WHAT SALARY COSTS CAN I CLAIM?

Salary costs often make up the largest proportion of an R&D claim so it’s imperative that they are correctly handled. The gross salary, employers’ National Insurance, company pension contribution and certain reimbursed expenses can be included as part of an employee's salary cost for R&D purposes. It is important to note that the cost of dividends and benefits in kind are excluded. This is a crucial tax planning issue if the directors involved in R&D take a small salary and large dividend.

We are often asked how to apportion an individual’s time to R&D activity when compiling a claim. The simple answer to this is to ensure it is apportioned in a just and reasonable manner. We encourage our clients to keep timesheets, but this isn’t always possible. It is important to note that there is no statutory requirement to keep timesheets, but it certainly makes a claim more robust if they are available.

Reimbursed expenditure

Reimbursed expenditure is not a separate cost category as it forms part of staff costs. However, it is worth explaining in a little more detail as we often get asked about expenses by our clients.

The rules about reimbursed expenditure are a little confusing and often result in confused faces when we explain them to clients! To complicate things further, even HMRC have issued conflicting guidance on the matter! On 27th October 2016, HMRC issued its position on the matter and stated that reimbursed expenditure is qualifying if two requirements are fulfilled. These are:

• The expenditure is initially borne by the employee and not the company.
• The expense is directly related to the R&D and is necessary to perform the duties of the person’s job.

What this means is that expenses which are paid for by a company credit card are automatically disallowed from being classed as reimbursed expenses. Many clients are surprised to learn that the method of payment determines whether or not an item can be included in their claim. We recommend you speak to us if you feel you may have a situation where a large amount of R&D expense may be disallowed as a result of the method of payment.

WHAT IS A CONSUMABLE?

For the purposes of R&D tax relief, HMRC’s definition of a consumable is intentionally broad. Any items which are used by the R&D and are no longer so useable in their original form, because they are finished up, or transformed can be classified as R&D consumables. Put simply, this is the stuff which ends up in the bin as a result of the development activity. Common examples include the cost of trial casts by a foundry which have to be scrapped as a result of defects, laboratory materials used by a company which utilises a science lab or the cost of wasted raw materials for a company involved in the manufacture of new and innovative surfactants.

WHAT IS A SUBCONTRACTED COST AND HOW MUCH CAN I CLAIM?

Subcontracting can be a tricky situation in an R&D tax credit claim, but it doesn’t necessarily mean you can’t claim. You need to clearly understand your contractual situation, the work you are contracted to do and who is bearing the brunt of the cost, as all these can influence the eligibility of subcontracted work.

There are a considerable variety of possible contractual arrangements but the most common is where one company engages another company to carry out R&D activity on its behalf in exchange for payment, with the first company having rights to the intellectual property resulting from the R&D. In this case the first company is sub-contracting the R&D to the second company.

Under the SME scheme, 65% of payments to sub-contractors can be claimed except if the SME is connected to the sub-contractor (e.g. is its parent, part of the same group, or are under common control). The rules are different for connected sub-contractors and it may be possible to claim 100% of the costs. However, this requires certain conditions to be met.

WHAT IS AN EXTERNALLY PROVIDED WORKER (EPW) AND HOW MUCH CAN I CLAIM?

The definition of an externally provided worker is a little long and convoluted – to make things easier it’s probably better if we simply call them agency workers. These are workers which are provided by a third party but are under the supervision, direction and control of the company that is making the R&D tax claim. Agency workers are common in a number of sectors which are likely to undertake R&D – these include IT, software, food and drink and manufacturing. HMRC allow companies to claim 65% of the cost they incur from agencies for staff involved in any qualifying R&D project.

Where the company/agency providing the staff is connected for tax purposes to the claimant company, it is possible, providing certain conditions are met, for 100% of the cost incurred to be included in the R&D claim. These are called connected EPWs.

I’VE HEARD ABOUT NEW RULES RELATING TO OVERSEAS SUBCONTRACTOR AND EPWS. WHAT ARE THEY?

From April 2024, where companies subcontract R&D activity to a third party, they will only be able to claim relief for that expenditure where that third party performs the work within the UK. The rules for subcontracting will not otherwise change.

Where companies incur expenditure on payments for externally provided workers (EPWs), they will only be able to claim relief on such expenditure where those workers are paid through a UK payroll.

This is a significant departure from the old rules and one which will require a good number of companies to rethink their R&D strategy.

WHAT SOFTWARE COSTS CAN I CLAIM?

HMRC allow the cost of software directly employed on R&D projects to be included in an R&D tax claim. Common examples we see include the cost of CAD software for the design department of an engineering firm, the cost of casting simulation software for use on complex metal casts or perhaps the cost of software development licenses for a software company.

The cost of software which is employed on indirect qualifying activities is also allowable. This may include the cost of software employed by the HR department for the R&D staff. However, general software, which is used across the business for activities which are not related to the R&D function, is not a qualifying cost.

From April 2023, additional IT related costs will be allowable as part of an R&D tax relief claim. These include the cost of data relating to R&D activity and the cost of cloud computing services used directly for R&D.

WHAT ENERGY COSTS CAN I CLAIM?

Although HMRC classify energy costs under the consumable category, we prefer to separate this cost into its own category. A reasonable and justifiable proportion of the cost of water, fuel and power (of any kind) is eligible for inclusion in an R&D tax claim. In most cases, this cost is not material to the overall claim, but it’s important to include every cost permissible to ensure a claim is maximised. We have seen advisers in the past assume this cost category is more akin to ‘general overheads’ and often included are items such as rent, rates and general business costs. This is incorrect.

I’VE CAPITALISED SOME OF MY R&D COSTS – CAN I STILL INCLUDE THEM IN THE CLAIM?

Yes! But there are some important points to note here. Capital expenditure is not eligible for R&D tax relief – however, just because a company opts to capitalise costs in its accounts does not mean that this is capital expenditure for tax purposes. Many of our clients opt to capitalise staff costs and include the costs in their R&D claim. This is perfectly fine. Staff costs are an excellent example of a cost which can be revenue for tax purposes but capital for accounting purposes. Where this is the case, the cost can be capitalised and included in the R&D tax claim. In simple terms, the accounting treatment of an item is not conclusive as to its classification for tax purposes.

Items such as large plant and equipment, motor vehicles and buildings are both capital for tax purposes and accounting purposes. Where this is the case, they are not allowable as part of an R&D tax claim.

I’M AWARE THERE ARE DIFFERENT SCHEMES FOR SMES AND LARGE COMPANIES. WHAT’S THE THRESHOLD FOR AN SME?

For R&D tax relief, an SME is defined as a company having fewer than 500 employees and one of the following:

Less than 100m Euro turnover

Less than 86m gross assets

This is a relatively simple test to apply when the company is privately owned and not a member of any corporate group. However, where there are linked enterprises or partner enterprises involved, things get a little more complex.

What’s a linked enterprise?

Two companies are linked if one can exercise direct, or indirect, control over the affairs of another, or if both companies are under common control (of another person or persons, including companies or individuals). This has important ramifications for R&D tax relief. If a company is deemed to be linked to another company, the combined turnover, assets and staff count of both companies must be applied to the SME threshold tests. Imagine a situation where a small company with 10 staff and turnover of 600k is 100% owned by a global corporation with 5,000 staff and 600m of turnover. In this scenario, the small company would fail the SME test by virtue of its ownership by the large corporation. Even if the larger company owned 51% of the small company, the SME test would still be failed as 51% indicates the larger company can still exercise control.

What’s a partner enterprise?

Companies that are not linked enterprises can be partner enterprises if one of them holds between 25% and 50% of the capital or voting rights in the other. Where a partner enterprise situation exists, the turnover, gross assets and headcount of the partner enterprise must be brought into the SME test. However, only the relevant percentage of the partner enterprise must be brought into the equation. For example, if a claimant company (A) holds 35% of the capital of voting rights of another company (B), only 35% of B’s turnover, gross assets and headcount must be brought into the test.

Can a company change status from an SME to a large company?

Yes! There are a number of different rules concerning the change of status from an SME to a large company for R&D tax relief purposes (and vice versa). The most important point to note is that companies normally have a year of grace when changing status. This means that if an SME has grown organically and then fails the SME test, it can still claim as an SME in the first year it has failed the test. If the SME test is failed for a second consecutive year, it must then claim as a large company under the RDEC scheme. The same rules apply for a large company which is shrinking and becoming an SME.

An important point to note is that if an SME is acquired by a large company and fails the SME test by virtue of the linked enterprise rules, it has to claim under RDEC immediately. No year of grace rules applies in this situation.

CAN MY CLAIM TRIGGER AN ENQUIRY BY HMRC?

Yes! The R&D tax claim is just another part of your overall corporation tax return and normal enquiry window rules apply. YesTax has extensive experience in dealing with enquiries concerning R&D tax claims. This gives you peace of mind, knowing that your claim will be handled by advisers with years of experience in dealing with HMRC.

HMRC has significantly increased its resources for R&D related enquiries in recent years. More R&D enquiries are being opened than ever before.

HMRC may open an enquiry into a claim for several reasons. The most common in our experience are:

• HMRC requiring further evidence that the R&D activity being undertaken meets the qualifying criteria for R&D tax relief.
• HMRC requiring further evidence that the company meets the SME definition.
• HMRC expressing concerns that incorrect categories of expenditure have been claimed.
• HMRC asking if the company has received any grants or subsidies on the projects being claimed.
• HMRC expressing concerns that the whole of a project has been claimed, rather than just the parts which involved qualifying R&D.

Some advisers claim a 100% success rate where claims are concerned. When you’ve been in the game as long as we have, it’s impossible not to attract an enquiry at some point. So we don’t claim a 100% success rate. Anyone can claim this, without it being true. We’re just comfortable knowing our vast experience counts for more than any arbitrary and unproven statistics.

WHAT IF MY CLAIM CONTAINS ERRORS? WILL I BE PENALISED?

If an R&D claim contains errors, HMRC may charge penalties which are linked to the amount of tax lost to the exchequer. However, these penalties are dependent on a number of factors. These include whether or not the error was intentional, how forthcoming the tax payer is with information during an enquiry and whether or not reasonable care and attention was made during the preparation of the claim.

By using a specialist advisory firm like YesTax, the risk of error in your claim is reduced.

I’VE MADE A CLAIM AND I’M EXPECTING MONEY BACK. HOW LONG WILL IT TAKE?

For obvious reasons, this is a question we get asked very often! If your claim is for an SME R&D tax credit, HMRC aim to repay monies due within 40 days. However, this is not a statutory requirement and many factors result in this target being missed. HMRC’s R&D units are extremely busy, particularly in December, March and September. Often, claims submitted in these months will be delayed.

The 40 day processing target was previously 28 days. However, in June 2022, HMRC increased the processing time to 40 days to enable them to carry out enhanced checks on certain claims.

Claims for RDEC repayments can take much longer. YesTax has experienced claims taking over 6 months to be processed. This is mainly due to the fact that large companies have more complex tax affairs and often the R&D claim is just a small part of an overall return. If your claim is made under the RDEC, be aware that it may take a while to receive the benefit.

YesTax has prepared R&D tax claims for many years – however it doesn’t mean we receive preferential treatment from HMRC. HMRC will not give favours to any R&D advisory firm (regardless of what their marketing may claim!). HMRC are impartial and do not move claims made by certain advisers to the top of the pile. We can do our best to get your claim submitted as quickly as possible, but once it’s with HMRC, we can’t move it along any quicker.

I’VE SEEN THAT FIRMS OFFER 100% SUCCESS GUARANTEED. DO YESTAX OFFER THE SAME?

No! For the simple reason that no firm can offer 100% success guaranteed! If claim success was 100% guaranteed, there would be no need to use a firm like YesTax!

Many R&D claims are complex and involve (in certain areas) a degree of subjectivity. Our experience means we get it right – but we won’t lie and say this is 100% guaranteed. Claims are reviewed by HMRC and occasionally, they may wish to ask further questions or disagree with our interpretation of certain aspects of the claim.

Our reputation, familiarity with HMRC, experience and approach to claims means we get it right. But can this be 100% guaranteed? No. We’d rather be honest than use false claims in our marketing!