This blog post is part of the Greater Birmingham Chambers of Commerce’s Invest to Grow campaign. Invest to Grow aims to inspire and inform businesses around investment in R&D, innovation, technology and machinery and how it can help boost productivity through case studies, expert opinion pieces and briefing information. Click here to find out more and don’t forget to join the conversation on social media with #I2G18. Part 1 of Invest to Grow focuses on investment in innovation and research & development and is sponsored by the University of Birmingham.
Having been around since the year 2000, with over 140,000 claims having been made and more than £14bn claimed in tax relief, it could be assumed that businesses were aware of R&D tax credits and the relief that may be available to them. However, 18 years later some common misconceptions still exist that result in missed opportunities and under-claimed relief. There are six common R&D myths:
Manufacturing businesses represent the highest number of claims in the UK, but claims are also regularly made by transport and storage businesses, construction and real estate as well as financial services and agriculture to name a few.
The fundamental purpose of R&D is to create a competitive advantage. If your company’s R&D puts you ahead of your competition and creates a scientific or technological advance in your sector then it will qualify. More often than not, relief if claimed by companies which spend money on improving or modifying existing products or internal processes.
The submission of an R&D claim does not mean that HMRC will automatically investigate other areas in the return. Claims are usually submitted with supporting documentation which sets out the qualifying R&D activities undertaken, the basis for the claim and how it is calculated. Reports like this help to reduce the chances of a challenge from HMRC.
RSM is a leading provider of audit, tax and consulting services to middle market leaders, globally.
With around 3,500 partners and staff in the UK and access to more than 43,000 people in over 120 countries across the RSM network, we can meet our clients’ needs wherever in the world they operate.
As an integrated team, we share skills, insight and resources, as well as a client-centric, collaborative approach that’s based on a deep understanding of our clients’ businesses. This is how we empower you to move forward with confidence and realise your full potential. This is the power of being understood.