Need support for your R&D Tax Relief claim? We can help.

  • By David Buckley Ph.D
    • Oct 27, 2022
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Need support for your R&D Tax Relief claim? We can help.

Businesses across the UK are constantly innovating, especially startups in the science, engineering and software industries. The good news for these businesses is that HMRC incentivises this innovation through R&D Tax Credits, specifically through the SME Tax Credits and R&D Expenditure Credit schemes. The schemes are designed to encourage greater spending on R&D so that UK businesses will have the funds to invest more money in innovation.

But even though these schemes can deliver lucrative tax relief benefits, many businesses are underclaiming and missing out on large potential savings. This means they’re missing out on money that could otherwise be invested in further innovation, growth and hiring new staff. That’s why many businesses would benefit from support through their R&D Tax Relief claims.

Why do businesses need support for claiming R&D Tax Relief?

There are several reasons why businesses might need support when claiming R&D Tax Relief. The business may:

  • Have little to no understanding of how the scheme works (or even that it exists)
  • Find the process of claiming difficult (or, at least, not easy)
  • Be over-claiming
  • Be under-claiming
  • Not having the time or resources needed for making a claim

The result of these reasons is that a business could miss out on tax relief that they are entitled to, or they might risk an enquiry from HMRC. In this article, we discuss each of the reasons and explain how Leyton can support your businesses while making an R&D Tax Relief claim.

A business may have little to no understanding of how the scheme works (or even that it exists)

HMRC commissioned an Evaluation of the R&D Tax Relief for SMEs, which revealed that awareness of the scheme was poor and that many businesses did not have a good understanding of how it worked. The evaluation revealed that:

  • 51% of businesses were not aware of the scheme
  • 27% of businesses had heard of the scheme but didn’t know much about it

This means that the majority of UK businesses (78%) would benefit from support when claiming R&D Tax Relief simply because of their lack of familiarity with the scheme.
How Leyton can support: While the R&D tax schemes have some complex intricacies, our team’s experience and guidance make the process simple. We will walk you through everything you need to know about R&D Tax Credits, including the different expenditure categories. You’ll also have access to expert technical and financial consultants handling your claim so you can ask questions at every stage of the application.
You can also learn more about the R&D schemes by reading our articles on R&D Tax Credits For SMEs: Your Questions Answered and RDEC Explained: Everything You Need To Know About The R&D Expenditure Credit Scheme.

A business may find the process of claiming R&D difficult (or, at least, not easy)

HMRC’s R&D evaluation found that of the businesses that were aware of the scheme and used it to claim tax relief:

  • 18% found the process difficult
  • 27% found the process neither easy nor difficult

The main reasons for finding claiming difficult were listed as:

  • Identifying whether a project is R&D (33%)
  • Understanding what you had to do (31%)
  • Identifying qualifying expenditure (25%)
  • Recording information (20%)
  • Generally working through the admin (19%)
  • Finding the time and/or capacity (17%)
  • Something else (20%)

How Leyton can support: By working with Leyton, your business can save itself a lot of time and effort. We’ll do all the heavy lifting, such as identifying qualifying expenditures, gathering R&D project expenditure data and technical and financial documentation. We’ll take you through the entire claims process, including preparing the final documentation for sign-off and submission.

A business may be over-claiming

HMRC’s R&D evaluation also found that some businesses were including “expenditure that they were unsure will meet the criteria”. This is a risky approach, as claiming for expenditure that doesn’t qualify for R&D Tax Credits could trigger an enquiry from HMRC.

How Leyton can support: We work closely with businesses to properly qualify all R&D activities. We do this by conducting a detailed review of your business’ eligible projects before selecting the key projects(s) for claim substantiation. To safeguard your claim, we compile a detailed technical report explaining exactly how this work qualifies for the R&D Tax Credit.

For businesses already facing an enquiry, we also offer an Enquiry Support Service for R&D Claims.

A business may be under-claiming

Crucially, HMRC’s R&D evaluation reported that some businesses would exclude “any expenditure that they are not certain will qualify. These businesses suggest that they may be ‘missing out’ on some relief as a result.”

How Leyton can support: Businesses often underestimate how innovative they are. This is where Leyton can really add value. Our technical consultants have field experience across a wide range of software, science and engineering industries. This experience gives them an advanced understanding of research and development. It allows them to dig into the detail and identify qualifying areas of research and development expenditure that might otherwise be missed. We have several case study examples that demonstrate how we’ve helped businesses (that had claimed R&D credits in the past) go on to increase their tax savings:

Seanamic: We helped Seanamic increase their tax savings by 400%.

Alex Thomson Racing: Our technical understanding helped Alex Thomson Racing uncover extra value from their tax claims.

FGP Systems: We increased the value of FGP Systems’ annual claim from £125k to £800k (over 2 years)

If you think that your business has missed out through under-claiming in the past, it’s still worth speaking to one of our specialist R&D tax consultants. Find out more about how we can help if you are already claiming for R&D tax credits.

A business may not have the time or resources needed to make a claim

Finding the time and/or capacity was listed in HMRC’s R&D evaluation as one of the main reasons businesses found claiming difficult, with 17% listing this as a reason for struggling with R&D Tax Credit claims.

How Leyton can support: We’re here to help. Leyton is the largest specialist innovation funding consultancy in the UK. Our expert consultants have a proven track record of putting claims together with speed and efficiency. Furthermore, we uniquely have the technical expertise and resources to allow us to dive into your research and development activity, which is ultimately how we’re able to secure the maximum possible financial relief for your business.

Claiming financial relief through R&D Tax Credits is often the lifeline businesses need for unlocking growth. The financial benefits received from your R&D Tax Credits are often significant enough for you to reinvest in further research and development activity as well as hiring new staff.

Get in touch today if you need support with your claim.

Need support with your claim?

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David Buckley Ph.D
David Buckley Ph.D

Senior Technical Consultant

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