The time limit for a research & development tax relief claim is two years - measured from the end of your business accounting period. This ties in with the deadline for amending any Corporation Tax on your return. If you are a business operating in your first year then you may have a different timeline, with your incorporation date creating the registration date, and your first period of accounting being defined as twelve months from the end of that nominated month. This needn't apply going forward as you choose your accounting period. F.Initiatives can help you to assess how far back your particular business can claim for.
The usual period is 28 days from the submission of your application to receive your R&D tax credit if you are an SME that is making a claim. For repayments of Corporation Tax, the timescales can be as short as one week. Due to the complexity of claims made by larger companies, the time frame for payment can be longer. Remember to allow a further 5-7 days for HMRC to make the payment and for it to appear in your bank account. An SME is wise therefore to allow at least 35 days from the date of an approved submission. Ideally, you should allow longer in case the process is held up, or in case it goes to enquiry.
Remember that seasonal availability and peak workloads at HMRC can affect processing times. At F.Initiatives, we always submit your claim with the right lead time, in order to get your funds or refund as soon as possible.
When HMRC talks about competent professionals, it refers to someone in the industry with the right qualifications, experience, skills and track record for the job in hand. For example, this might be a process engineer in a chemical manufacturing plant, or it might be a Chartered Accountant in a finance firm.
Within your business, this individual is the person who is best placed to make a judgement about the activities that count towards R&D. When a business prepares its own R&D tax credits claim, a competent professional must assess the projects which qualify for an R&D tax credit, the project boundaries and the applicable activities. They will then apportion expenditure to those identified activities. It is vital that accurate and detailed biographical information of your technical professional is included in the technical narrative that you submit with your R&D tax claim. This demonstrates to HMRC that you have applied due care and attention and applied the correct boundaries when assessing qualifying activity.
When submitting a research and development (R&D) claim for tax credits, you need to include a detailed technical narrative that will demonstrate in a clear and compelling way a) the technical nature of the project identified as being eligible for tax credits, b) the challenges faced in developing the innovation, c) the resources utilised and d) the achieved outcomes. Include details of how the R&D activities eligible under the R&D tax credits scheme were identified and assessed and describe the qualifying projects in detail. Begin with a background that explains your business within the context of R&D and isolate any commercial sensitives. Your F.Initiatives advisory team will be able to guide and assist you with your technical narrative and review it before it accompanies your R&D tax credits claim submission, which we prepare and submit on your behalf.
If you already use the services of a research and development tax credit advisor and wish to commission a new R&D advisor, check the details of your contract first to ensure that any contractual tie-in period has elapsed. If so, you can notify your existing R&D advisor and then initiate the switch. If you are locked in, then you will need to read the contract carefully to identify any possible opt-out clauses, ideally with the help of your solicitor. Always do your research in order to find a trusted, reputable and highly professional R&D tax claims advisory service with the necessary expertise and track record in submitting thorough, robust and effective R&D claims that make the process easy and get the right results for the client. A good indicator of a quality provider is one with plenty of good customer reviews and a multi-disciplinary team which includes tax advisors and consultants, accountants and former HMRC tax inspectors, along with a best practice process and keen commitment to quality assurance.
No, you cannot. This is because HMRC expect to see due care and attention made when applying for R&D tax credits, and this means carefully assessing the unique detail and eligibility of qualifying R&D projects each and every time you prepare a claim. However, it is common for businesses to have R&D projects that last for several years, so that same project can be the subject of year-by-year claims for R&D tax credits.
You cannot recycle an annual claim form for ease, but you can use the basis of a previous R&D tax credit claim as a broad template or starting point for which you can start a new within-year claim. Remember that F.Initiatives can help you to make the R&D tax incentive claim process easy, with a robust and effective methodology that streamlines the process and ensures that your application is ready to meet the needs of HMRC.
The precise figures that will be applicable to your business will depend on whether it is registered under the SME R&D tax calculation scheme or the RDEC scheme which is primarily for large companies, as well as other factors. As a broad rule of thumb, if you are a profit-making SME then you could potentially have up to 25 percent of your R&D investment costs refunded in the form of tax credits. A loss-making SME could expect to receive up to 33 percent back into the business and an SME in a break-even situation could potentially expect around 15 percent. For a larger company developing R&D under the RDEC scheme, up to 10 percent of research and development costs could be claimed back. This means that the value of R&D tax credits can be highly worthwhile, especially if you are running a business that invests heavily in innovation as standard, and spends heavily on engineers, developers and other specialists that seek to find new solutions to existing problems. Contact F.Initiatives and we can give you a clearer idea of the potential benefits that an R&D tax credits claim could offer to your business, as well as information about R&D grants that you may be eligible for.
There are two main approaches. You could task internal staff with the responsibility of preparing and submitting your R&D tax credit claims and upskill them accordingly or hire in specialists on a permanent, full-time basis as part of your headcount. Alternatively, you might prefer to use the expert services of a specialist R&D tax credit and grant advisor to manage the process for you in a quality-assured, tried and tested and results-driven manner, on a 100 percent success costing basis. The latter approach gives you year-round access to highly-experienced and regarded professionals in the field who know tax credits and grants inside out and who can guarantee the best possible result for your business, managing the entire process for you from claim preparation through to submission to HMRC. To find out more on a no obligation basis, contact the team at F.Initiatives today.