With guidance still to come, the creative industries may be missing out on R&D tax relief claims

When people think of R&D, they might imagine the swish of a lab coat or a cross-section of an engine.

While it is the case that R&D does need to involve an advance in a field of science or technology, this can originate from any sector.

Those in the creative industries may be conducting R&D, but the lack of awareness of how to approach R&D tax relief claims in the sector could be holding them back.

As announced clarity on guidance still waits on the horizon, it is time to understand how to make the most of R&D tax relief claims now.

What work do the creative industries do that can be R&D?

The creative industries are quite expansive and can often feature a range of innovations needed to make art come to life.

This could include video game developers developing novel software or technology to create new experiences or filmmakers who seek an advance to achieve their artistic vision.

Before the end of the year, it is hoped that additional guidance will be unveiled that should provide greater clarity on how those in the creative industries could approach R&D tax relief claims.

Any delays could see valid claims slipping out of the timeframe of eligibility, so we want to support claims in the interim.

Not all work conducted in any sector will constitute R&D, as it must meet the following criteria:

• Be significant in the sector.
• Cannot be readily deduced by a competent professional.
• Involves some degree of technical uncertainty.
• Features work conducted during the financial year.

Just because a process is novel for the industry or company does not mean that it qualifies if it is an advance that is commonplace elsewhere.

How can the creative industries manage R&D tax relief claims?

Any submissions from the creative industries should come with the caveat that an enquiry is likely.

That is not to say an enquiry is inevitable, but the creative industries are a red flag for HMRC when assessing R&D tax relief claims due to the number of fraudulent claims in the past.

As such, it is imperative that only eligible R&D work is considered when compiling the claim, assigning costs and crafting the technical narrative.

Any work done for aesthetic or commercial reasons should be disregarded as the inclusion could jeopardise the entire claim.

While seeking advice from an R&D tax consultant is always wise when making a claim, it is imperative that those in the creative industries seek this additional support.

We can help determine the eligibility of any project and craft a maximised, fully compliant claim on any qualifying work.

Given the intersection between science and art that is present in the creative industries, greater care will need to be taken when assigning costs to ensure that artistic work is not factored into time spent on a project.

We can sense check any apportionment of figures to ensure that everything qualifying is included and everything that does not qualify is excluded.

When clearer guidance does get released, we will be sure to spotlight it so that those in the creative industries can approach their R&D tax relief claims with greater confidence.

For dependable R&D tax relief support across all sectors, speak to our team today!

Tom Mason