Tax compliance under the spotlight as HMRC reforms loom

Tax compliance under the spotlight as HMRC reforms loom

The clock is ticking towards new government legislation that could penalise companies that claim tax relief for research and development activity.

From April 1st, 2023, changes to R&D tax credits mean claims made to HMRC will be subject to higher levels of scrutiny, require added layers of information, and need to be submitted digitally.

The move is designed to clamp down on anomalies and reported abuse of the current system – with fines for non-compliance now reaching up to 100% of the initial tax relief granted.

North-east firms should act now to ensure they are equipped for the approaching deadline, according to a leading R&D tax credit specialist. With offices across the UK, ZLX Business Solutions has recently moved into state-of-the-art premises at neospace, Riverside Drive in the heart of the Granite City.

The company is led by a team of experienced consultants, including highly skilled accountants and engineers, who help clients identify projects eligible for tax relief and then guide them through the claims process.

ZLX says that HMRC’s renewed focus on improving compliance, which affects both SMEs and large organisations, creates more red tape for businesses and could potentially jeopardise economic recovery if firms don’t seek advice.

Founder and CEO of ZLX Business Solutions, Stephen McCallion, explained: “These latest reforms and tightening of the regulations surrounding R&D tax credits carry the potential to penalise businesses that are either not aware of the new requirements or that have made errors in good faith as part of their claim for tax relief.

“With the deadline fast approaching, businesses across the north-east need to make the necessary preparations now. This is particularly important given an estimated five-fold increase in the number of specialist inspections carried out by HMRC, providing a real deterrent against non-compliance.

“Any business that develops new products, services or processes may qualify for R&D tax credits so it’s an extremely wide net when it comes to the scope of these changes, despite many businesses still failing to take advantage of tax relief entitlements.

“For companies that are active in R&D, it’s imperative they seek the right professional advice at the earliest opportunity to not only deliver maximum ROI but prevent them from falling foul of these impending legislative changes.

“As the go-to experts for tax compliance, our team at ZLX Business Solutions have broad expertise across a range of technical disciplines and accountancy so are ideally placed to identify relevant opportunities for clients and add value to their bottom line.”

ZLX Business Solutions provides trusted counsel to company founders and directors around tax compliance, raising finance, restructuring, and market repositioning. It works across the engineering, manufacturing, construction, energy, food & drink, and agriculture sectors with organisations at every stage of their growth journey.

For further information on ZLX Business Solutions, please contact 01224 123456 or email