Free HMRC Research and Development Claims Service
HMRC have recently released an online form that enables companies to create research and development claims for tax relief using their online portal and submit it to HMRC for free. They also have fairly detailed guidance to help you through the process.
We’ve taken a look at the new service and it looks really helpful for clients wanting to submit their own simple claims under the SME scheme. HMRC’s process makes it clear they don’t want pages and pages of information. However, you do need to know what to put into the forms! To use the service, log into the portal using your normal credentials and start a new claim. The form is relatively easy to fill in. You will need to enter the costs you’ve collated and provide details about the projects. The form sets out what you need to provide, which includes the “standard” research and development (R&D) questions and the total costs allocated to each project, with helpful drop down guidance notes to assist. You can also save your progress and return to amend/submit the claim at a later date – you have 28 days to do so.
Why are we Publicising This?
We know there are a lot of people in the market place charging more than 20% + VAT (up to 35% + VAT in some cases) to help you complete your research and development claims. If your claim is costing you this much, and you’re capable of doing it yourself, then you may wish to save the company what might be a lot of money by using the new HMRC service. DIY research and development claims have always been an option, but HMRC are trying to make it easier and more accessible for customers.
Why Might you Still use an Advisor?
Just like everything else related to tax, R&D is a complicated area of specialist tax advice. Some research and development claims are very straightforward, but as with all areas of self-assessment, the quality of the output depends on the quality of the input. A company may opt to still use an R&D adviser for the same reason they outsource many other areas of their business, for example:
- R&D claims are not always easy – we know the rules inside out and will help make sure your claim is correct and is right first time.
- Peace of mind – Our 100% success rate for research and development claims means we stand in good stead to help ensure your claim is robust and will withstand HMRC scrutiny and we’ll help you defend the claim in the event of an enquiry.
- Saving time and money – We can take the pressure off having to complete your own research and development claims. We can agree fixed fees in advance – this may be a worthwhile investment when comparing the value of your time spent on other areas of the business.
- Maximising your savings – We can ensure everything that you’re entitled to claim for makes it into the claim and that you aren’t missing out.
- Mitigating risk – We know problem areas and stay up to date with current HMRC thinking – we can spot areas of risk and help you ensure these are dealt with (e.g. software claims, subcontracted R&D etc.).
- Make your claims both HMRC and “due diligence” proof – Research and development claims can be seen as a significant risk area in transactions if a buyer thinks the claim is overstated or shouldn’t have been made. Specialist tax input takes away that risk.
With more than £40m tax savings across c700 claims under our belt, we’d love to have a conversation with you about how we can save you money and help you claim the relief; we can work with your existing accountant and we offer no obligation discussions.
If you’re confident on preparing your claim, but still want the benefit of professional advice, we are able to offer a middle ground service. You would prepare the claim yourself then we will review it for you to highlight any risks or issues. We will feed back any changes or advice and all that’s left to do is hit ‘submit’!
We offer this service for a fixed fee, allowing you to balance the best of both worlds. A fully outsourced claim can be costly, a free claim could be risky; our review only service can provide much needed support to a confident but cautious client.
If you have any questions or if you would like to discuss Research and Development claims with us in more detail, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with a member of our Research & Development Tax team.
This article originally appeared on the blog of our member firm, Tait Walker.