In recent years, the number of UK companies making fraudulent R&D tax credit claims has risen. There are a few reasons for this, one being that the tax advice market has become saturated with consultancy firms claiming to be ‘experts’ when they are not which has led to some firms seeking incorrect advice from ill-qualified agents. This is why it is paramount to seek expert advice from a trusted specialist like randd uk who has over 13 years of R&D tax experience.
Another reason the government has been clamping down on fraudulent claims is that some claimants embellish the amount of time and money they have spent on R&D in their claim submission. Keeping a reliable record of your R&D activities and understanding what qualifies as R&D is a key to avoiding tax inquiries and having your claim investigated by HMRC, which is why we always recommend speaking to a specialist like randd uk before starting the claim process.
What legislation has led to the government clamping down on fraudulent claims?
- The PAYE/ NIC cap- enforced from April 2021 and will affect R&D tax relief of some genuine SME companies
- New software guidance- HMRC have hardened their reviews of software R&D in recent years
- New online submission service- makes it easier for HMRC to spot errors and fraud
- New CT600 rule- enforced on April 1st, 2019 any R&D claim must be accompanied by a full CT600 computation
- HMRC increased the number of staff in their tax compliance team
The bottom line
R&D fraud is not always the result of claimants deliberately making erroneous claims- it can be the result of a lack of awareness and understanding of the scheme and the claiming process. With HMRC putting more resources into spotting fraudulent claims, more and more businesses could face inquiries into their submissions unless they talk to a trusted specialist like randd uk first.
Seek tax advice from a trusted specialist
Randd uk are R&D tax credit specialists that have been helping UK businesses submit their R&D tax claims for over 13 years. Our team includes industry experts across a wide range of sectors comprising software, manufacturing, and engineering (and many more) which allows us to fully understand the intricacies of our client’s claims meaning we can mitigate the risk of inquiries and investigations from HMRC. Our team also includes technical experts and fully chartered accountants that ensure the numerical, methodical, and scientific side of the claims we submit to go through numerous inspections to certify all aspects of the claim are compliant with HMRC’s regulation. Moreover, we stay completely up to date with any changing R&D legislation allowing us to provide our clients with reliable and accurate advice. Lastly, we guide our clients through every step of the process allowing them to understand their claim so its validity is always checked and the risks associated with claiming are included in our service.
Remember, HMRC can investigate previous successful claims and can ask claimants to pay back the money. Not all tax adviser firms are regulated so it’s vital to research your R&D adviser and understand your contract before beginning the claim process. Speak to one of our team today to see if you qualify for the R&D incentive.