Top 5 Easy Ways To Speed Up An R&D Tax Relief Claim
When you submit a claim for R&D Tax Credits, the hope is you’ll receive the relief as soon as possible. HMRC strives to turn claims around within 28 days, but of course resources are limited and the number of applications is steadily increasing. So it’s well worth making sure you’ve done everything possible to get your claim dealt with swiftly.
At Myriad Associates (developers of the Tax Cloud portal) we regularly get asked how claims for R&D tax relief can give speedy results. So with this in mind, we’ve put together our top 5 suggestions.
1. Make sure you've met all the requirements
If you don’t quite include everything accurately, or you miss off any vital details, then HMRC is likely to launch an enquiry delaying your application. This makes it well worth ensuring everything is completed correctly, including all your eligible R&D costs. You will also need to utilise HMRC’s guidance in explaining why you believe your costs should be considered as R&D. Making a decent job of these two things shows HMRC you’ve taken your application seriously and thought everything through, and not sending them could arouse suspicion leading to further delays. As part of our service, we will check your claim for you before it’s submitted to HMRC.
2. Check you’ve used the right branch of the scheme
The R&D Tax Credits scheme is divided into two branches - the SME branch and RDEC (Research and Development Expenditure Credit). Most companies will fall under the more generous SME scheme, whereas larger, more established companies will likely come under RDEC.
Broadly speaking, you should claim R&D Tax Credits using the SME branch of the scheme if your company has under 500 employees. It should also have an annual turnover of no more than €100 million, and/or a balance sheet less than €86 million. A larger company using RDEC will have over €100 million, and/or a balance sheet showing at least €86 million.
However, there are some exceptions to these rules, particularly if an SME has received state funding (see our next point)…
3. Be careful if you’ve already received state funding
Your R&D Tax Credits claim is likely to be affected if you’ve received grant funding. The part you need to figure out is whether your grant contributed to the project work for which you’re claiming the R&D relief.
The SME R&D scheme is very generous, so much so that it is deemed to be State Aid all by itself, and EU law forbids companies from receiving more than one State Aid for a project. So in essence, if any Notified State Aid money at all has been received by a company, then it is barred from using the SME scheme to claim R&D Tax Credits. Additionally, once a grant has been received by a company, it can’t simply be given back in order to claim using the SME scheme. This means that some planning may need to be done in advance.
Receiving state aid doesn't necessarily mean R&D Tax Credits are off the table, but you may need to claim under the less generous RDEC branch of the scheme instead. This would be regardless of your company's size, assets and turnover. It’s all about understanding whether you’ve claimed Notified State Aid (funding typically administered by national or local government) or Non-Notified State Aid.
It can be a little hard to get your head around, but if done correctly your business could benefit from both R&D Tax Credits and grant funding concurrently. This could give it a much needed financial boost for reinvestment into growth.
4. File an amended CT600
In filing an R&D Tax Credit claim, both financial and technical information must be submitted alongside the tax return containing a CT600. At Myriad Associates we’ve discovered a good way to avoid an HMRC enquiry (and hopefully turn a claim around quicker) is to file the accounts and tax return as normal, minus the R&D claim amount. An amended tax return should then be filed later which includes the R&D claim amount. It seems like you’re ‘going round the houses’ a bit, and admittedly it’s a little protracted, but there’s a good reason behind this method. By doing it this way, you’re making sure the claim is dealt with by an R&D Tax Credit specialist at HMRC, instead of by a general tax office inspector who may not have specific R&D tax relief knowledge. It’s a highly niche area, and by making sure the claim goes directly to the R&D specialists at HMRC there’s less likely to be questions and therefore delays.
5. Use the services of R&D experts
Making a DIY claim for R&D tax relief is likely to lead to mistakes, even if you’ve claimed before. The process of applying can be complex, and any inaccuracies will lead to delays. This is because if anything crops up that HMRC isn’t happy with, they will ask questions or even launch an enquiry which can seriously hold things up. Again, this is why we highly recommend using a firm of R&D tax specialists such as ourselves.
The team behind Tax Cloud (Myriad Associates) is a team of R&D tax advisors that have helped hundreds of companies from a huge range of industries gain the R&D tax relief they deserve. With a 20 year history and many repeat clients, we’re proud of our 100% of success rate. We have a detailed understanding of R&D processes and can effectively communicate to tax inspectors the scientific or technological advancement achieved. We provide a structured approach to identifying and demonstrating R&D expenditure, offering a high quality, complete end-to-end service.
The Tax Cloud portal is specifically designed by our specialist team of R&D advisors and accountants, it offers a fully loaded R&D tax claims service at the lowest possible fee. Simply sign up and add in your details to start creating your claim, and we’ll do the rest.
- Submitting R&D tax claims since 2001
- 100% success rate
- Over £100m claimed and counting
- Industry leading specialists
- In-house technical, costing and tax experts
- Member of the Research and Development Consultative (RDCC) committee
Meet some of the team behind Tax Cloud