For many innovative businesses, it is necessary to submit R&D tax relief claims every year or two to adequately capture the work that they do.
These returning claims need to be managed carefully as they could accidentally fall foul of HM Revenue and Customs’s (HMRC) rules and invalidate the claim.
We want to highlight the benefits of letting the same R&D tax consultant help you with returning R&D tax relief claims.
What are the risks of returning R&D tax relief claims?
Innovation is the core of R&D tax relief claims, but the guidance often clashes with the nuance of reality.
To compile a completely safe R&D tax relief claim would be to pioneer an entirely new innovation every time, with no connection to anything that has been claimed previously.
However, that is seldom how things work, especially not for businesses that have R&D as a core focus of their work.
Not every R&D project has a neat finish line, as it is far more likely that resolving one technological or scientific uncertainty opens the door to another one.
When novel processes are developed, there is a question of whether these can be improved upon or further refined.
For instance, if a new manufacturing method cut carbon emissions by half, it is understandable that the next step would be to try to half the emissions again.
This would require new R&D to tackle a new uncertainty, but would be based on a lot of existing work.
Despite the inspiration for the project having its origins in previous R&D tax relief claims, it is imperative that nothing from those existing claims be brought into focus for the latest claim.
If HMRC perceive some aspects to be directly repeated, they will reject the R&D tax relief claim on the basis that the money has already been awarded in a previous year and cannot be claimed twice.
How can staying with an R&D tax consultant mitigate the risks of returning R&D tax relief claims?
If an R&D tax consultant is doing their job effectively, they will have copies of your previous notes, calculations and R&D tax relief claims.
This will enable them to know exactly what information has been previously submitted to HMRC so that later claims can focus on more up-to-date information.
While it is true that businesses could take their R&D tax relief claims to a different R&D tax consultant, the discussions of previous years are not transferable.
This means that the work and discussions that led to previous R&D tax relief claims may get lost along the way, resulting in a weaker claim.
Weaker claims are harder to defend from HMRC enquiries, so if your R&D tax consultant has proven their worth in the past, then it may be worth sticking with them.
We endeavour to provide ongoing support to all businesses that work with us.
We look to the future of your R&D as well as the work that is currently in discussion to ensure that you are not locked out of future claims by poorly handled technical narratives.
Instead, the technical narratives work to lay the foundations for future R&D tax relief claims so that they will work in your favour rather than against you.
As we build a long-term relationship with businesses, we can better support your evolving R&D work to ensure that you remain rewarded for your endeavours.
Get started with your next R&D tax relief claim by speaking to our team today! We can help you receive the relief as cash or bring the claim forward as a tax saver.
