The importance of working with specialists when choosing R&D tax credits adviser
LIKE any marketplace that experiences an increase in demand for services, the number of companies providing ‘professional' R&D tax credit advice has grown significantly.
These so-called specialists are offering to provide businesses with tax advice, but signing up with an inexperienced, unqualified adviser could have damaging consequences for your business.
R&D tax credits are a valuable source of funding, but to optimise this fully, companies need to choose their specialist adviser wisely.
Statistics from HMRC show that Northern Ireland businesses claimed a total of £55 million in R&D tax credits this financial year. But that represents just three per cent of total UK claims and two per cent of the total tax benefits claimed, highlighting that there is still a wealth of potential available across the local business sector.
"It is increasingly alarming that many companies are being misled and misinformed about the R&D tax credit initiative," according to Tom Verner of Momentum.
"Businesses can find themselves repeatedly contacted by advisers, promising that ‘everything you do qualifies', it is a stark warning sign that all is not as it seems.
"There are still many local businesses that are not aware of R&D tax credits, or incorrectly think they do not qualify and are not claiming their full legitimate entitlement.
"When it comes to choosing your R&D tax credit partner it pays to be cautious and do your due diligence prior to signing on the dotted line. Before engaging with any adviser, it is crucial that you ask for references and take time to understand what is included in the fee offered, along with any hidden costs i.e. investigation fees. A reputable advisory firm should always be able to provide evidence of expert knowledge and insight into legislative changes."
The legislation pertaining to R&D tax credits is complex and HMRC's criteria for qualifying activities and expenditure is very specific. It requires an R&D tax credit specialist with technical expertise across a range of sectors to truly understand the detailed processes.
"To date, HMRC has identified and prevented £300 million in fraudulent tax credit claims. It is becoming increasingly common for advisory companies to leave clients unsupported when an investigation from HMRC arises, and at Momentum, we regularly pick up the pieces of the horror stories," Mr Verner added.
"As a member of HMRC's R&D consultative committee, HMRC's high level of scrutiny is highly commended by Momentum. Our approach has always been to apply the highest professional standards to every claim we prepare, resulting in a 100 per cent success rate across more than 800 claims with over £125m in R&D tax relief approved."
Momentum is a multi-award-winning R&D tax credit advisory firm working alongside entrepreneurial accountants, trusted financial advisers, financial institutions and other professional organisations, we specialise in identifying all qualifying R&D activities to optimise the true value of R&D tax relief available.