HMRC to make claiming research and development tax relief easier!

What’s the latest?

The Government have announced a plan outlining how they intend to make it easier for small firms investing in research and development (R&D) to claim the associated tax relief.

This follows on from a lengthy consultation by HMRC to tackle the perceived low take up rate by small businesses. HMRC intend to raise awareness of the relief and make the application process easier.

In addition, from next month, small companies with less than £2m turnover and 50 employees will be able to seek advance assurance that the R&D activities undertaken qualify for relief before making a claim. If advance assurance is given, it will mean that HMRC will allow the first three years of R&D claims without further enquiry.

The advance assurance is completely voluntary and you can still use an R&D tax expert, like Clive Owen LLP to make the claim!

Details of the HMRC plan can be found here

Our thoughts

We have said many times that R&D tax relief is being overlooked by several businesses, particularly in the North East and Yorkshire. In fact, the North East is the bottom of the English league for R&D tax relief claimants, which we find outstanding and unbelievable given the amount of manufacturing and engineering that takes place in the North East.

We believe that this is mainly due to:

  • Modesty of clients not believing that their activities qualify for the relief.
  • Misconceptions in respect of the relief – you don’t have to wear a lab coat to qualify!
  • Lack of promotion (or even knowledge!) of the relief by other accountancy firms.

In recent weeks we have met with potential clients to discuss R&D tax relief to be met with responses:

“If the relief was available, my accountant would tell me”

“We don’t carry out any R&D”

“The company has made losses and has never paid any tax”

In all these cases we have been given the go ahead by the client to prepare the R&D claims as we were able to overcome these objections by advising:

a)      That unfortunately for many companies, particularly those that use smaller accountancy practices, the relief is overlooked as too much emphasis is placed on the year end procedure and not advice.

b)      That on a tour of the building, there was one department with employees working in it with the words R&D on the door. When asked what happened in that department, the penny dropped.....

c)       That the company does not have to make profits to qualify as companies with a loss can surrender this to HMRC and obtain a cash sum from HMRC.

All of these claims are either in progress or have been submitted to HMRC.

Why Clive Owen LLP?

We are one of the leading promoters of R&D tax relief in the North and we (together with other Kreston members) have claimed several millions from HMRC in R&D relief for clients in fields such as engineering, processing, chemical, healthcare, computing and much more.

We also work closely with Teesside University to obtain an impartial assessment of the R&D claim which will undoubtedly assist with any advance assurance claim made to HMRC, if such assurance is sought.

We have extensive experience in preparing R&D reports for submission to HMRC. Our experts will visit your premises for a holistic overview of your business and work with your technical team to prepare the report to send to HM Revenue & Customs.

In addition, we do not need to disturb your relationship with your current accountants as we can work alongside your existing advisers by preparing a R&D report to submit to HMRC whilst advising the current advisers about the claim to be made.

If you would like to know more about the R&D relief please call or email:

Nicola Bellerby 0191 384 2244 / 07736 618169

Alan Moore  01325 349 700 / 07711 698762

Terry Doyle 01904 784400 / 07712 660359

Lee Watson  01325 349700 / 07740 340245