Research and Development (R&D) Tax Credits can make a huge difference to businesses with the UK Government having granted thousands of UK organisations returns of up to £600,977 so far in the 2017-18 financial year. Whilst some business owners jump at the chance of essentially being given free money, others are put off at the thought of a tedious claiming process. Thankfully, there are various companies who exist to help businesses process their R&D claims, much like ourselves. It can however be too easy for Managing Directors to rush into the process and settle on the first consultancy they come across and not the best for their business.
Before choosing a company to help process an R&D Tax Credit Claim, businesses should first really investigate and consider a few factors to ensure their claim has a greater chance of success.
HMRC often carry out compliance checks on claims which could simply be at random or because of inconsistencies or mistakes. Unfortunately, this is where a lot of claims go wrong. But it’s usually the case that inconsistencies or mistakes are down to the fact that collating the correct technical detail and producing a qualifying innovation report requires technical knowledge and without this it is extremely difficult to produce a report acceptable to HMRC. This is why businesses who are looking to make a claim should choose R&D Tax Credit consultants who are expert in the understanding and qualification criteria from both the technical points and the tax perspective.
You might determine whether or not a company is expert enough by looking at its experience. For example; how many claims they have helped to process, how often they help to process claims and most importantly, their understanding and knowledge of your particular industry. Tax rules are specific to different industries, so when claiming for R&D Tax Credits, you must apply the tax rules that are fixed to your industry. Your R&D Tax Credit consultant should be completely capable of quickly recognising the projects that qualify for the tax credits and effectively communicating what is being sought. At ZLX, we specialise in the fields of engineering as Managing Director, Stephen McCallion has thirty years’ experience at the top end of innovative engineering.
When choosing a company to process your claim, it’s not a simple case of having one meeting and then commencing the project. The process should be thorough from beginning to end, and if not, this is a concern. Companies who are making a claim have a legal obligation to provide the correct information, while R&D tax credit consultants have a duty to reach a comprehensive understanding of the business they are working with. Only a rigorous, disciplined process can ensure this. The ZLX process goes through six stages, the last of these being when we actually commence the project. Before processing the claim, ZLX will: perform a Companies House check, arrange the first meeting (this is being done through Zoom at the moment), review contracts, check company credit information, and build timeframes.
Support and Communication
Finally, you must consider the level of support and communication your tax credit consultant will provide. Alarm bells start to ring when consultants don’t spend any time with their clients and exclude them from the entire process. At the end of the day, it is really you who is responsible for your R&D tax credit claim, therefore you must be aware of what it consists of. To ensure seamless support and communication, ZLX appoints a dedicated Account Manager to clients who will complete the process and review it on a regular basis.
While many businesses do qualify for R&D tax credits, not all claims are accepted. If you decide to choose a company to help you process your claim, think carefully before committing to one. To qualify for R&D tax credits is a great opportunity, so find a company who will put you in the best position to succeed.
If you are interested in processing an R&D Tax Credits claim, get in contact with one of our consultants today.