Can I apply for R&D tax credits myself?
Businesses are able to apply for their own R&D tax credits themselves, however there can be a risk of doing so. Without getting the correct advice you are potentially missing out on all the full potential you can get from your claim.
Take a look at the three biggest risk factors of applying for the R&D tax relief on your own, to see if you can avoid these risks by choosing an R&D tax consultancy.
1.The more time spent, the less money you are making
Having an expert in the field of creating an R&D tax credit application work besides you ensures that you will not have to sacrifice your time at work to go through the complicated process of completing the forms. By working as a team with your R&D Tax adviser you can ensure that no corners will be cut and the claim will be proficient. More often then not the claim will get challenged by HMRC, which we can greatly effect the time process and further prolonging time that could be spent elsewhere in the business is having to be spent revisiting the claim.
By using an R&D tax consultancy, there will be no implications within the claim and you won’t be left potentially undervaluing the R&D. R&D tax credit claims can’t be managed solely by the finance team without technical input. It is more often then not that the finance teams are the ones to discover and manage the R&D tax credits and frustration or conflict can occur, when they need engagement from the technical team to complete the application.
Our approach, is a personal one. We want to get the best out of your claim and by allowing your time to be kept to you while we take away the stress of the claim, you can put your time into your business. Although we are not able to prepare the claim without information from the client, we can certainly reduce the stress, time and energy that would otherwise arise if completing solo.
2. You may get less than money than you are due
By choosing to self-prepare an R&D tax credit claim you are at risk of not getting the full benefit to which your work can entitle you to. You could be missing out on getting relief for significant cash investments you’ve already made as a result for not identifying all of your R&D projects or missing some R&D costs.
It is so common, that nearly a fifth of SME claimants received less than £5,000. Which is in a lot of cases, way to low against an SME average claim of £53,714. Even more so considering that SME claims sometimes can be worth hundreds of thousands of pounds.
You may be wondering why self-claimers get the value wrong, to put it simply it is just because it is not their speciality. For example, not being confident in grant funding or subcontracted R&D puts the claim in risk of missing out on money you are due.
To those who aren’t confident within dealing with R&D tax credits, there are a few situations which can prompt a bit of confusion. For example:
- Accurately calculating the R&D tax credit benefit whether that be for both loss-making and profit-making businesses. Also how to calculate the benefit for claims where profits fluctuate.
- Determining whose R&D it is when multiple parties are involved in a project .
- Learning and understanding the rules around concocted parties and R&D tax incentives.
- Being able to define a large company vs SME, plus if one becomes the other knowing what to do with the R&D tax credit claim .
- How it’s possible to use grants and R&D tax credits.
- How to correctly calculate claims for businesses that are part of a wider group, particularly where there are group losses, or recharges of R&D expenditure between companies.
Not only can undervaluing the claim be a concern, overvaluing the claim is evident too when completing it on your own. Overvaluing runs a risk of a potential HMRC enquiry. Businesses that do one small claim without a challenge can go on to repeating the same mistakes in the future only with much bigger numbers.
We want you to get the most from your claim as we don’t want your business to miss out on its full-value claim.
3. Your R&D tax credit might turn against you
Self-prepared claims run a high risk of including errors and being inaccurate. This is due to the complications that can occur when completing a claim when self applying. HMRC will instead of sending you a cheque will send you a letter, if they spot an error or suspect there might be one. The letter they send you is an ‘HMRC enquiry’ letter which simply means that they are wanting you to produce more evidence to substantiate your claim which sometimes can end up accumulating penalties if you cannot convince them the claim was robustly prepared.
R&D enquiries penalties used the be quite rare but are now looked at as a standard practice, due to HMRC’s change in approach. The penalties are higher where taxpayers don’t contribute professionally to an enquiry, for example, not replying to emails on time.
This experience can lead to businesses regretting their choice of making a claim and is also another reflection of shortcuts to forge tens and thousands of pounds.
Our Access Portal allows you to track your process from start to finish, which gives you piece of mind and allows you to see that your claim is in good hands.
See our Knowledge Base for anymore questions regarding R&D tax credits so you feel knowledgeable to make the right decision.