Decom North Sea members, Jumpstart, explore potential pitfalls when making an R&D tax credit claim...
Despite a 14% growth in the number of companies claiming last year the complexities faced by companies preparing claims are still significant.
To illustrate this we have outlined a few of the most common dangers for companies
UNDERCLAIMING
It’s easy to under claim by missing out eligible costs, especially if you’re not certain about what is and isn’t eligible for relief but being over cautious can mean losing out on substantial sums of money.
UNCLEAR ELIGIBILITY
Lack of clarity on the eligibility of your projects can lead to enquiries or rejection of a claim. The complexities faced by a company need to be explained clearly and simply
GRANT IMPLICATIONS
Even the smallest of grants can impact on the relief available. If one penny of state aid supports an R&D project, the whole project ends up in the large company scheme. Meaning a £1,000 grant for a project with £100,000 of eligible expenditure, can reduce the potential benefit from £25,000 to just £8,800.
DON’T RISK IT!
The government wants to ensure that only those entitled to tax benefits gain access to them. Regardless of the scheme. If you get it wrong, HMRC can open an enquiry and ask for their money back, even years after you’ve received the benefit.
At Jumpstart, we only see half a dozen out of over 500 claims submitted annually being spot-checked by HMRC, due to our well-trained, experienced staff and our quality processes. These guarantee a robust, persuasive narrative and properly assessed figures. We’ve defended each and every queried claim successfully, achieving a 100% strike rate for our partners and clients and maintaining our excellent reputation with HMRC.
Jumpstart has helped Aberdeen businesses save substantially more than £6m since 2008, and more than £2m through the recent slump in oil and gas prices. The Edinburgh-headquartered company has been instrumental in assisting local firms claim tax credits on their investment in new processes and technologies, principally but not exclusively in the energy sector. Despite Aberdeen’s oil and gas exploration sector suffering from the worldwide drop in prices, 2015 saw £1.2m recovered from HMRC, and 2016 has seen £840,000 claimed to date.
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