Leonherman Regulated by the ICAEW

R&D Tax Credits Changes 2023: Why you should use a regulated firm to help you with your claims (incl. Video)

From August 2023, an R&D tax credits claim must include details of any agent who has assisted with the claim. The agent must be registered with HMRC, and take some responsibility for the claim. Here's why we recommend using a regulated firm used to operating under regulatory scrutiny and with high levels of accountability.
Why you should now use a regulated firm like Leonherman to support your R&D tax credits claim

2023: The R&D Tax Credits Scheme is Being Reformed

To great fanfare and success, the government has promoted businesses to use R&D tax credits to help the UK economy prosper in a competitive global environment. But in some ways, the R&D tax credits scheme has been a victim of its own success.

Unfortunately, over the years, some businesses and tax credit ‘agents’ have taken advantage of the system by making fraudulent or over-inflated tax relief claims. And HMRC has been under significant scrutiny to tackle fraud and abuse of the system.

That’s why, in recent times HMRC has started to crack down significantly on this fraudulent activity and has decided to reform the R&D tax credit system.

From 8th August 2023: You must identify the agent who helped to prepare your R&D claim

From 8th August 2023, in order to tackle perceived errors and abuse of the R&D tax credit system, any Research and Development (R&D) tax relief claim must now be supported by an additional information form submitted to HMRC using the online government gateway.

Importantly, this form must also be endorsed by a named senior officer of the company and must include details of anyone who has assisted with the claim such as an agent.

Previously, anybody could support your business to make an R&D tax credit claim.

Agents would make recommendations and help you fill out the claim form, but then take no responsibility for the claim being accepted by HMRC, and the onus was on you to sign off on the claim.

Crucially, these agents would have very little accountability if the claim was challenged by HMRC.

As of August 2023, this has changed.

From now on, anyone who supports a business to make a claim must be registered with HMRC, they must have their details logged within the HMRC database, and effectively, they must take some responsibility for the claims that they make on behalf of a client.

This is a major change and should remove many suspect players from the marketplace.

Any agents who have been pushing the legislation beyond breaking point, finding and submitting claims that they know to be beyond the government’s R&D remit will no longer be able to operate with the level of impunity they have up until now.

In the short video above, our R&D tax credits expert, Jonathan Day, outlines the key changes, and why we would advise you to use a regulated accountancy practice, like Leonherman, to help you submit an R&D claim following the recent changes.

If you’re considering an innovation project and you’d like Leonherman to help you with your claim, then you can book a free consultation with Jonathan Day here.

Why you should choose a regulated accountancy practice to help with your R&D claim

Accountancy practices like Leonherman – who are regulated by the Institute of Chartered Accountants in England and Wales – are used to operating under regulatory scrutiny and with the levels of accountability that will now be found in the R&D tax credit market.

We have always accepted responsibility for our advisory work and have had no choice but to put our name on any records that we submit to HMRC on behalf of our clients.

The same cannot be said for a lot of the agents found in the R&D tax credits market.

In short, if you need to submit an R&D claim, you can leverage our experience of working in a regulated environment and rest assured that your R&D claim will go forward with confidence and responsibility.

How will Leonherman help to reduce the risk of your business having an R&D claim challenged or rejected?

Having an R&D claim reviewed or challenged can create significant costs and delay for a business. In our experience, this is far more likely if your claim has been compiled by questionable R&D expert.

In contrast, here’s how Leonherman can help you to reduce the risk to your business:

1. We will meet with you to help you better understand what work aspects can and cannot be considered towards a claim for R&D Tax Credits;

2. We will ensure the work that you will be putting forward for a claim is structured accordingly into the relevant process elements of R&D, to ensure that the maximum potential claim value can be harnessed;

3. We will ensure your research is well documented in a manner that supports a review of the research by HMRC should they deem it necessary;

4. We will help you to engage legal advice, to ensure contracts with third parties, be they clients or subcontractors, enshrine the ownership of the research with you, the claimant;

5. As a regulated, independent specialist, we will compile your R&D claim, report and HMRC AIF, maximise the claim value and ensure key HMRC tests for any valid claim are met.

Contact our R&D Tax Relief Experts

Leonherman have a significant understanding of the R&D tax credits scheme.

Crucially, we are an independent specialist, regulated by the ICAEW, and we are used to operating under regulatory scrutiny. We have always been expected to put our name alongside our advisory work.

If you’re considering an innovation project in your business, and you’re unsure as to whether you will have a valid R&D claim or not, get in touch with us without delay to arrange an initial, free consultation with our R&D experts.

We will help you better understand what constitutes a valid claim for R&D tax credits with HMRC. We will let you know if we think you will have a valid claim, and importantly, we will tell you if we think you don’t have a valid claim and whether we feel it’s worth your time putting forward a claim or not.

What’s more, our wider financial advisory team will support you beyond the initial R&D claim, helping you to make R&D a key driver of your business value and growth strategy moving forward.

Book a free consultation with an R&D tax specialist here, call us on 0161 249 5040, or email: partners@leonherman.co.uk.

Important Disclaimer

This material is published for client information. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. No responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by Leonherman.

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