We hear of R&D tax claims that have been subject to a lot of scrutiny by the HMRC or that have been rejected after a long process. And this does surprise us here at Lumo a little, to say the least. We have a 100% success rate for R&D tax claims with the HMRC, so decided to share some of our knowledge to ensure that you get the most from your claim.
One of the most common areas for concern is that you haven’t made it as clear as possible for the tax man to understand that nature of the research and development in your business. In this article, we share with you our top tips for helping the tax man to understand and make that pay out as quickly as possible. After all, it’s cash flow that a business is looking for to stay ahead of the game. Without delay, let’s take a look
Remove Technical Language
We all use jargon in our business, no matter what it is we do. Some of the more technical terns we use might be easily understood by someone else in your industry, but do they really mean a great deal to anyone else? Remember that the HMRC are experts in tax, and therefore might not know a great deal at all about your particular industry. They won’t be blinded by science. If you fill your R&D tax claim with technical language, jargon and abbreviations then only one thing will happen
They will ask you a load of questions about it.
And this delays the time it takes to make a claim. If your claim is submitted correctly and clearly explains what is going on, then you can end up with the money back in the business within as little as 4 to 6 weeks. If the tax man needs to ask a stack of questions, then this will turn this into a much longer timescale.
Complete All of the Required Information
There are certain questions that the HMRC want answers to –
- Did you look for an advancement in technology?
- Did you have to overcome uncertainty?
- Did you try to overcome this uncertainty? And how did you do this?
- Could this have been easily worked out by a professional in your field?
And guess what? If you don’t answer all of these questions, then you can end up with an R&D tax claim that is either rejected or where the tax man comes back and asks for the answers to these. And you don’t want that.
Make sure you answer all of the questions that have been asked so you can speed up your claim and send the chances of it being accepted through the roof.
Don’t Exaggerate, Make Things Up or Fill in the Blanks
If you are making an R&D tax claim for your business, then the simple truth of the matter is that you may be working blind in some places. You can make a claim for R&D tax credits for the last 2 tax years as well as the current one, so there is little wonder that some companies submit claim and don’t know the intricate details of what happened all that time ago.
The best strategy is to make notes as you go along. This will not only help you with the costs but will also allow you to look at the uncertainties and how you solved them. But if you are making a claim now and want the tax man to understand what you have done, then we suggest you take the time to make sure the facts are correct. Don’t exaggerate costs, as the HMRC deals with R&D tax claims every day all day so will know what an average cost looks like.
Seek the Help of an Expert
If you want to make sure the tax man understand your claim and you get that pay out, then you should seriously consider the help of an R&D tax expert. They will have all of the experience and knowledge to be able to get you on the right track.
At Lumo, we know R&D tax like the back of our hands. It’s what we do. This means we make sure the tax man understands the research and development element in your business and get that claim submitted with the best chance of success – and a speedy resolution too! Drop us a line to find out more.