7 Common Objections to Making an R & D Tax Credit Claim (Part 2)
This month we continue our look at the top 7 most common objections that we have encountered in our conversations with SME business owners.
Objection 4: “We did it before, years ago, and it wasn’t worth the hassle”
A number of businesses we have spoken to recall a previous bad experience with making a claim that has put them off completely. This can be for a variety of reasons. Your experience of submitting a claim in 2000, when R&D Tax Credit was first introduced, would be a lot different to what it would be now.
It is also fair to say that not all R&D Tax Credit Consultants are the same. Many accountancy practices and organisations offer R&D Tax Credit Consultancy as one of a portfolio of services.
At Fiscale we have a very strong belief that this area is highly specialised and should not be just a “bolt on” to other services. That is why we don’t offer accountancy despite our Tax Credit Specialists being fully qualified and competent accountants. We can however work closely with a client’s accountant to gather the required information and to ensure the correct accounting reporting structures are in place going forward.
The understanding and interpretation of the guidelines issue by HMRC is fundamental to making a successful claim. We guarantee that if you choose to work with Fiscale you will not be left feeling “underwhelmed” by the return on investment from you R&D Tax Credit claim.
Objection 5: “I’m far too busy running my business”
Everyone is busy. Weeks fly into months and before we know it another year has passed. From a business perspective we have to focus our attention on those activities that are going to make a difference.
Consider how much time and effort you would put into trying to win an order for £45,000? That is the value of the average R&D Tax Credit claim that we secure on behalf of our clients. Our top value claim this year was for £100,000.
The majority of clients spend 2-3 days of their time, under our expert guidance, gathering the information required to enable a claim to be submitted. Even if you value your time in excess of £1,000 per day you could still be generating a return on investment of over £40,000!
Thought provoking isn’t it?
And... all our clients go on to make further claims in subsequent years. We work with them to ensure the systems and procedures are in place to make future claims far more streamlined.
We have not yet had a client who did not feel that the time invested was worth the return. Read the case study on Vetstream, an extremely busy and diverse company operating in the veterinary sector, to find out how they found the process.
Don’t be a busy fool when there’s “free money” on the table.
Objection 6: “We don’t retain the intellectual property for the products we design”
Many SMEs are a key part of the supply chain - using their knowledge and experience (intellectual property) to create solutions for their clients.
Such companies often acknowledge that their clients are involved in the R&D process, maybe even at the cutting edge of innovation. However their perception of being the “backroom boys” means they do not appreciate the level of R&D that they themselves are undertaking in satisfying their clients’ requirements.
If what they are producing for the client is a new or improved product or the design and development involved some uncertainty, for which the answers were not obvious, then it is highly likely that the activities being carried out are eligible. This was certainly the case with our client, Camtech PCB, who operate in the Electronics sector. Have a look at their case study.
Objection 7: “I would rather not get our hopes up only to be let down months later”
Concerns over being led on a “wild goose chase” are of course very valid. There aren’t many business owners who wouldn’t welcome an injection of cash into the company but few have the luxury of being able to pursue something that is not going to come to fruition.
Utilising the services of a specialist R&D Tax Credit consultancy, such as Fiscale, removes the risk factor. In the majority of cases a 20 minute telephone conversation is sufficient to ascertain if there is the basis for a claim. Where the business process is more complex then a “Discovery Meeting” is arranged to establish eligibility.
As far as Fiscale is concerned, working under a “No-win, No-fee” arrangement, it is in our best interests to only submit claims that we believe qualify. We are so confident in our experience, abilities and staff that we take most of the risk! The proof - a 100% success rate.
Our average completion time, from initial meeting to the client receiving a cheque from HMRC, is 12 weeks. Earlier this year we managed to complete 99% of a claim for Fellowship Productions in just 3 working days. Find out more in our July blog.
R&D Tax Credit submissions are dealt with by a specialist department within HMRC. Providing the required information is submitted to them in the correct format everything usually progresses very smoothly. No hopes dashed here!