Five Reason Not to Make a R&D Tax Credit Claim
I have many satisfied clients that have claimed back tens of thousands of pounds in Research and Development Tax Relief and Tax Credit, yet it is the many that don’t take that step that I am concerned with here. Why would a company that qualifies for R&D tax relief not make a claim?
If you read this headline would you be ever so slightly interested?
“MD’s – find out how to earn £40,000 for less than a day’s work!”
That’s the average amount that companies claimed in R&D Tax Relief or Credits in 2011 (according to Government statistics) and that’s how much many of our clients get annually from submitting a Research and Development Tax Relief or Tax Credit claim, some will benefit much more, for one of our recent client’s in RandDTax it was more than £100,000 and that is post tax profit straight to your bottom line. For most MD’s it really is much less than a day’s work to make a claim.
So why do MD’s fail to submit a claim? Well here are the top five most common reasons I come across:
TIME: The Managing Director at the helm of their business cannot or does not find the time for a 15 minute telephone conversation to see if their company qualifies. MD are mostly really busy people so this is very understandable, but I do sometimes wonder what else they might be missing. With the benefit of hindsight most will agree that it was more than worth the 15 minute discussion to check if they qualify.
PREVARICATION: This is just the time factor in another guise, but in this case the MD finds the time for a telephone conversation but then prevaricates because they want to ‘look into things’, don’t get me wrong you should look into things, but do make sure you look into things proactively and come to an informed decision within a reasonable time frame. Don’t let it become a reason for not moving forward and then something you forget about – remember it could be £40,000 or more to your bottom line for less than a day’s work!
DOUBT: These are the people who don’t quite believe it’s true and never quite find the time (time!) to make sure that their belief is correct – people do need to be cautious, but R&D tax is one of the “good news” government initiatives – it’s not often that a government initiative is so good that it can look too good to be true! But the fact is that a lot of companies can secure significant benefits under the R&D tax credit and tax relief scheme and your company could be one of them.
UNINFORMED ADVISERS: A trusted adviser, perhaps someone who is in a position to advise on financial and tax affairs, tells the MD that they don’t have a viable claim or that they are not doing R&D (and actually this is not the case!) or the adviser might say it’s too complex, I’ve even heard “don’t touch it, it’s a minefield” (to me it’s more like a gold mine) – sadly misinformation on no information is one of the main reasons for companies not claiming, it happens all too often and companies lose out.
- WORRY: Some MD’s worry that it will open a ‘can of worms’ in terms of a spotlight from HMRC onto their business, when in fact they have nothing to worry about as the R&D Tax Units stick to their brief and are in my experience are very helpful. Or they worry that it will be a time consuming (time crops up at every corner!) and bureaucratic process. It does not need to be and when I work with companies I make sure it’s not. Even if you don’t have thorough records, a strong R and D tax claim can still be put together and it should take much less than a day of your time and effort.
It may sound corny – but I’m here to help you, a phone conversation, or an email or a meeting if you wish, is free – you just need to find the time! Call me – Linda Eziquiel – on 0771 9439 229 – your call could be worth quite a bit in money back from HMRC.
Coming up soon… The Five Steps to Completing a Successful R&D Tax Relief Claim
Are you ready to find out if you qualify or how much your R&D claims could be worth?