Questionable R&D Claims Causing Hidden Issues

Oct 20, 2020
Aaron is one of our tax partners, Aaron specialises in R&D Tax Relief, VAT, Trusts, Corporate Tax, Business Tax and Capital Gains Tax.
Questionable R&D Claims

Research and development (R&D) tax relief has been around for over 20 years now. The government is satisfied that the tax relief is working and helping the economy. This is because this scheme encourages businesses to innovate new technologies and invest in research and development to make their businesses more efficient. However, there has been an increase in questionable R&D claims in recent years. These have resulted in HMRC looking to make changes to the legislation to prevent abuse. One of the proposals is to cap the SME R&D tax credit at three times the company’s total PAYE and NIC’s liability for that year. It is expected that this will come into force from 1 April 2021.


Why do questionable R&D claims occur?

There has been a growth in the number of boutique firms offering an R&D tax claim service.  Some of these firms will often offer assistance that is far from professional due to their behaviour and lack of expertise. This has resulted in an increase in questionable R&D claims.


Why choose a qualified R&D tax specialist?

R&D tax relief is a very complex area and businesses should ensure that their claims are submitted by tax-qualified professionals with relevant experience in the area.

If your claim is not prepared by a qualified professional there is a higher risk that the claim is prepared incorrectly. This can expose the company to penalties where a claim is overstated. On the other side, there is a possibility that certain qualifying expenditure is overlooked resulting in understated claims.


How can we help?

At Hawsons we have a dedicated team of R&D specialists at our offices in Sheffield, Doncaster, and Northampton. Our team of specialists will help you to identify qualifying projects and prepare your R&D claim in line with the legislation whilst ensuring the claim is maximised.

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Aaron Hemmington, Tax partner

Aaron Hemmington

Tax Partner, Northampton