By now businesses across the UK should be well informed of HMRC’s push to make all tax across the board digital. This digital reshuffle to the tax system has been introduced to minimise tax gaps, which between 2020 and 2021 accounted for £32 billion (5.1%) of ‘total theoretical tax liabilities.’
So, what does this mean for those claiming R&D?
We can expect HRMC to demand more specific project information from R&D Tax claimants, soon we will be kissing goodbye to the times when a relevant person’s involvement in a project can be rounded up to the nearest percentage. Instead, claimants will need to give exact percentages alongside a justification for how this number was calculated for the relevant project.
This might sound like a nightmare for anyone reading who currently waits until the end of their financial year before embarking on the lengthy process of trying to recall what they (and their team) were up to 12 months prior, or accountants who every year must extract this information from their clients. For this exact reason, the R&D tax market is starting to become more and more populated with providers who have their own R&D Tax platforms.
What makes a good platform?
When looking at any platform where the client is the primary user, accessibility and information transparency will always be the most valuable feature for any platform. It can be argued that the most important feature for any R&D tax platform that will ensure maximum benefit for the client is the ability to track R&D projects in real-time as it not only benefits the consultants working on the clients claims but helps to provide more accurate information which prevents the chance of HMRC challenging the claim.
These challenges will become more and more likely over 2023 and into 2024 following multiple UK government budgets where plans to crack down on fraudulent claims have been a major topic in UK R&D. To find out more, click here to read our blog on the latest Spring Budget.
FI Groups R&D Platform
FI Group is always up to date on the latest R&D zeitgeists in each of the 14 countries we are active in. Across the globe, digitalisation is at the forefront of progress and interconnectivity. That is why we have been working around the clock to produce our own in-house R&D Tax platform.
The key features:
Year-on-year claim summary – Our clients can easily all of their claims from each year in one place, breaking down each project and easily comparing their previous benefits.
Project information – Eliminating GDPR risks by sharing detailed project data through email chains, clients can directly update their project details throughout the year. This also means that they do not have to scratch their heads at the end of the financial year trying to think what work they were doing 10-12 months prior to claim submission.
Claim Estimations – By utilising all the provided information, our consultants upload claim estimates to our platform so that our clients can keep up to date and know what their possible benefit might be, helping manage cash runway and plan for future expenses such as hiring new staff.
Delivery Timelines – In this section, you can see the exact stage your claim is at, so you are always kept up to date. This feature is also helpful in providing a clear line of communication on when our clients can expect their benefits.
In summary, we can expect HMRC to challenge more and more R&D Tax credit claims in the coming 24 months, to prevent inquiries initial submissions will have to be very precise and showcase clear R&D. Companies who are aligned with a specialist provider with an R&D Tax platform can prevent these challenges by having a portal that allows them to continuously update their project information with up to date data leaving less room for questions from HMRC. Therefore, when a business is next shopping for their specialist, they should come to FI Group to utilise our expert consultant experience and know-how, and our brand new R&D Platform.
Contact us today to book a demo .
