Finding the Goldilocks Zone when claiming your R&D tax credits
Goldilocks tried three bowls of porridge, three chairs and three beds before she found the Goldilocks Zone. HMRC won’t give you three attempts to get your claim right!
Yet a high proportion of incorrect claimants are overstating their R&D and leaving themselves vulnerable to lengthy HMRC enquiries.
Whilst maximising the value of your claim seems a reasonable thing to do so as not to miss out on vital cash, maximising it without strong evidence of qualifying activity is a risky undertaking, which means that instead of a cheque HMRC might send you a letter triggering a lengthy and unpleasant enquiry and a long delay of your claim.
Whilst HMRC offers exhaustive guidance on the legislation, it is not always straightforward when it comes to putting all the figures together. The definition of R&D is broad, however, it’s not that generous and only includes specific activities which meet strict criteria.
Whilst there are intentionally fraudulent claims being submitted to HMRC, there are cases when inaccuracies and errors creep up in totally eligible claims. It is also common for businesses to unwillingly repeat the same mistakes in subsequent years until the numbers in their claim grow, along with the risks of inquiry and penalties. If R&D is not your daily job, a serious misunderstanding of either the costs calculation or technical evidence preparation processes can jeopardise the claim and leave you with less cash and more stress.
This is why you should think carefully before going solo, and why you really shouldn’t underestimate the value of specialist R&D tax advice.
Our Free Audit can identify inaccuracies to optimise your claims, to maximise your benefit and minimise your risk of an investigation.
We are at the forefront of our industry, sitting on multiple HMRC committees to raise standards and our reputation is paramount. We do far more than just process claims: we guide you through your claim preparation process identifying activities, calculating expenses and putting it into the correct wording to ensure that your claim will stand up to HMRC’s scrutiny.
We are here to give you confidence around R&D so you can improve your claims and use the credit gained to invest in the future.