7 Shocking Truths That Reveal The Danger Of Using Your Accountant To Make An R&D Claim | Part 1
Are you already claiming for R&D Tax credits? If you are, are you using a specialist or your accountant?
You rely on accountancy firms to be open and honest with you, we know this is shocking information but the truth is that they’re probably not.
Increasingly, we’ve been made aware of cases where accountants are being taken to court due to negligence and not making their clients aware.
Accountants becoming reactive rather proactive when R&D experts step in
If you're using your accountant, are you aware of potential dangers? One of the biggest dangers is, if a claim is challenged by HMRC, it's you and your business that will receive the fines, not your accountant.
Using an account is the same as a GP vs a specialist. A GP has a wide range of knowledge, but to really get the very best treatment you would go to a specialist. You’d never ask your GP to perform surgery?
Here at Recoup, we go beyond the industry norms to ensure all our clients are safeguarded against, chief of which is that all our claims are made through our chartered tax advisers name.
#1 ITS TAX SPECIFIC, SO WHY IS YOUR ACCOUNTANT DOING IT?
Research and Development is a tax specific area, hence the main reason we use Chartered Tax Advisers, as not only are they accredited by the Chartered institute of Taxation, but also have a strong understanding of the legislation and BIS guidelines. Although everyday accountants will have an idea, or in some cases be an expert on the legislation, past experience has continuously shown projects being missed or overlooked. The scheme legislation states, "where a business seeks to achieve an advance in science or technology and/or activities which directly contribute to achieve this advance in science or technology through the resolution of science or technology uncertainty are R&D." In the majority of cases which are under-claimed, a huge part of the legislation is being overlooked.
A business may not always come across that breakthrough moment in science or technology. However, when a business experiences challenges/uncertainty with product development or issues on-site, it is the challenges/uncertainty, and not the ‘off-the-shelf’ solutions that are incorporated in order to resolve these issues, that are where R&D activity occurs.
#2 OUR CTA’S WILL DEFEND YOUR R&D CLAIM, WILL YOUR ACCOUNTANT DO THE SAME?
90% of R&D companies submit a claim but do not defend it if HMRC decides to challenge it. All CTAs on our panel will assist with any enquiries, ensuring the claim is filed correctly the first time. As it is our chartered tax advisers who submit the claim against their name, their relationship with HMRC is sacrosanct, it has to be thorough and robust. All submissions will be structured to limit the questions from HMRC, and all claims put forward will be structured to substantiate any questions HMRC may have, hence our 100% success rate.
#3 DON'T GET LEFT UP THE CREEK WITHOUT A PADDLE
In recent years the scheme has been taken advantage of by a small number of pirate accountants, more interested in a payday, which has led to investigations. Where a submission is found to be fraudulent, the fines are very large and would in many cases risk the longevity of a business. If a client's claim is not robust enough, we will not proceed with the filing of it.
To unlock a higher level of rebate and to ensure you don’t get into trouble for making a claim, you do need a specialist to look at this for you. There are plenty of software applications out there at the moment and even accountants are saying they can complete this work.
Well, they may be able to, but they will not be able to maximise your claim and safeguard you against HMRC. I generally go by the rule; you get what you pay for. There are always corners we can cut, but there is then generally a price to pay.
So to maximise your R&D claim, please contact us.