R&D Credits – An under-used tax break
ForrestBrown are specialists in identifying and claiming Research and Development (R&D) Tax Credits for innovative companies.
It is a valuable tax break but one that is frequently overlooked, often because of a significant misunderstandings over what constitutes R&D.
The key is to think beyond the obvious and to investigate any product or process that has been developed or improved. There needs to be a scientific or technological advancement (which is not as difficult to demonstrate as many people can assume), and there needs to have been an element of uncertainty over the outcome. But it could be anywhere, in any business: hidden in bespoke software or a new innovative type of packaging for example. Many people are surprised to hear that a significant number of our clients are involved in digital development, financial services, electrical engineering, internet businesses, e-commerce, games development and production companies; as opposed to the view of pharmaceutical giants and highly scientific businesses, which the term R&D often lends itself to.
The reward of a successful claim for an SME is a tax repayment or adjustment often running into tens, or even hundreds of thousands of pounds. It’s not unheard of for a company to be able to recover as much a 50% of their expenditure through the scheme.
Adding value through collaboration
By bringing us in to work alongside you, your client gets a highly specialised service focussed on getting them the money they are entitled to.
You get to enhance your own client satisfaction and retention levels through association – by calling in experienced tax specialists to deliver this valuable windfall. Moreover, we are happy to remunerate you for your time and effort, paying a referral fee as a thank you for the introduction. If your clients are starting to ask for specialised services which you’re not able to offer, then partnering with others able to offer the required skill set enables everybody to focus on what they do best.
How we work with partners on R&D claims
We have a proven process for working alongside existing advisers to deliver R&D tax advice. We keep you (as well as the end client) informed every step of the way, and we take great care not to interfere with your client relationships.
You may be concerned that there is some overlap between our services and the services you offer to clients. We’re highly specialised in our chosen area, and we focus on providing expert advice and guidance about innovation based tax reliefs, that’s all we do. We believe that the true value of a partnership comes from open collaboration and building up a relationship of trust. We only provide specialist corporate taxation advice, so we’re experienced at partnering with legal and accountancy practices that do not offer such a service in-house.
Plenty of upside; plus, avoid the downside
We have talked about the benefits for you and your clients, but it is also worth mentioning how working with us can help you manage risks in your business. We have come across cases where advisers have missed potential R&D claims and lost the confidence of their clients when R&D activity has subsequently been identified. Working with a specialist gives you the chance to be proactive and mitigate this risk. You may be fearful about losing a client because it’s an area you don’t have specialist knowledge in. The likelihood however, of losing that client if you’re not making them aware of the significant corporate tax savings available to them would seem to be far far greater.
Help spread the word of this UK success story
We are working hard to spread the message about R&D Tax Credits to sectors and parts of the UK that are under-claiming – despite widespread availability. It’s extremely satisfying to call a client and advise them that you’ve just heard from HMRC, their claim has been successful, and £80k has just been credited to their account. When in receipt of this sort of phone call, our clients are often understandably overjoyed. Help spread the word and become a part of this success story yourself. If you advise an innovative company find out how we can add value to your clients business’ today.