R&D – Everything you need to know about the latest changes

As a business owner, you’re likely familiar with Research and Development (R&D) tax credits and their ability to give your business a cash boost. However, recently there have been lots of changed to R&D tax credits which has caused many R&D ‘specialist’ firms to close and stricter rules applied by HMRC. 

Research and Development (R&D) introduced by the UK Government in 2000, rewards British companies for investing in innovation.

Since then, we have witnessed a wealth of changes year on year, some legislative but some simply as a result of interpretation of legislation. These have resulted in the scheme growing in impact and popularity, enabling a tremendous array of companies to reap reward for bettering their products, processes, and resulting technologies.

However lax management led to abuse, with some questionable claims slipping through HMRC’s scrutiny. Unregulated ‘specialist R&D’ firms emerged, often submitting dubious claims unchecked. Almost every practicing accountant will likely have seen at least one of their clients submit a claim for a project via such ‘specialist’ advisors that under scrutiny they suspect would not meet the qualifying criteria.

Many of these claims have clearly been processed without ever being reviewed and we have seen contents of some claims which, from just the wording submitted, clearly indicate without any in-depth review that the claim is not valid! Yet, they have been seemingly waved through by HMRC without challenge. Such claims are still at risk of a future enquiry and many companies who had received tax refunds are unaware that they may be liable to repay such refunds.

HMRC’s lax approach prompted revisions in Spring 2023, aiming to tighten scrutiny and deter abuse by demanding more upfront information from applicants. This includes improving their review processes and requiring a great deal of additional information to be provided at the outset alongside any prospective application. The intention here is to reduce the levels of abuse within the R&D space by making it more difficult for unethical R&D providers to process applications on behalf of clients, owed to the additional information and explanations required.

We have put together a whitepaper which details:

• How does A4G approach R&D claims?
• What has changed since April 2023?
• How long am I exposed to an enquiry from HMRC?
• Standard and Discovery tax enquiries
• Eligibility
• Costs that can be claimed
• Potential penalties
• My R&D Specialist is no longer operating. Can I still make a claim and what do I do in the event of an enquiry?
• Other reliefs and financial help

To download the whitepaper, just pop your details in the form below.