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As R&D tax consultants, we pride ourselves on the accuracy of the R&D tax relief claims that we submit.
However, there are plenty of innovative businesses that try to submit R&D tax relief claims without assistance or who rely on uncertain accountants to help them.
R&D tax relief claims can be complicated and it is little wonder that mistakes are sometimes made by those with less time to focus solely on them.
When an error does occur, it is important to know how to handle it.
Can errors in R&D tax relief claims be corrected?
As with most tax filings, there is scope to correct mistakes once they have been submitted.
For R&D tax relief claims, this can be done through the R&D Disclosure Service.
Rather than wait for HMRC to confront an innovative business on its error, using the R&D disclosure service is a good way of signalling that it was an honest mistake and that no fraud was intended.
As such, there is only a limited number of instances where the R&D disclosure service can be used.
The R&D Disclosure Service can only be used when a business has claimed too much in R&D tax credits, cannot amend their corporation tax return and needs to pay additional Corporation Tax or repay overpaid tax credits.
However, if an innovative business did knowingly submit false information, then it is not possible to use the R&D Disclosure Service even if they have had a change of heart.
It is also not possible to use the service if there is no Corporation Tax to pay or if there is still time to update the Corporation Tax return.
How can errors in R&D tax relief claims be avoided?
While it is worthwhile knowing the options to correct mistakes, the best course of action would be to submit an accurate R&D tax relief claim in the first place.
HMRC has worked to improve the integrity of R&D tax relief claims by implementing more measures to crack down on error and fraud.
Failing to accurately submit an R&D tax relief claim at this stage means that innovative businesses are unnecessarily attracting the ire of HMRC.
Rather than risking making a mistake and then looking to fix it later, it would be better for innovative businesses and the accountants who help them to seek advice from a trusted R&D tax consultant.
We can help review your R&D tax relief claim before you submit it to HMRC to ensure that all costs are accurate and that the project qualifies.
If you want our support at an earlier stage, we compile R&D tax relief claims following discussions with the innovators themselves about the work that they do.
Where R&D tax relief claims have been submitted and an HMRC enquiry has been launched, we can also help defend the claim, provided there is something eligible within the claim to defend.
Where that is not possible, we will advise on minimising your exposure to penalties and help you to avoid future errors.
R&D tax relief claims can feel complicated, but there is expert support available to ensure that you get it right.
For advice on accurate R&D tax relief claims, speak to our team today.
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