Research and development (R&D) tax specialist Jonathan Leefield, director of Datafox informed delegates at The Morning Advertiser’s MA500 conference in Cambridge today (8 February) on the benefits of working with companies like Datafox to process a tax claim.
He said: “It is lucrative for companies that are spending money on R&D, they can get back about 33% of the money they are spending.”
“Limited companies pay an awful lot of tax but there are allowances they should be claiming if they are bettering their businesses.
“The whole point of this is that companies remain competitive and the Government does this so people come up with new things, so they can innovate and do better at business to make more money for the country.”
Leefield outlined exactly how ‘small companies’ (fewer than 500 employees) can claim money back for R&D.
He said: “We have to see a company’s financial information and need accounts that have been filed with HMRC.
“From this, we put together an accounts spreadsheet so we know what the quantifying spend is on their R&D, including everyone involved in the project, such as subcontractors.
“We then put together a technical narrative, working with our client to find out what the projects are and what the R&D on it is before going into a claim procedure where we collate all the information and put it into our internal review board to check before it goes to HMRC.
“We go back to the client to let them know the value of the claim and any implications. They give us their approval then the claim is submitted to HMRC and wait four to six weeks for them to come back.”
Eligible hospitality businesses
Leefield also showcased some case studies of businesses that have successfully received cash back for their innovations.
He added: “Almost all hospitality businesses could be eligible because it is wide-ranging and open to limited companies as long as they are not a partnership and pay corporation tax.
“We represented a brewery in Sussex that creates its own beers and runs a lab to do that. It is testing products all the time in the lab because without that, it wouldn’t have a product to sell. The costs from running that lab are counted as R&D.
“We also represented a restaurant that was creating new flavour combinations of food. These foods are totally new in terms of the way they are created and put together and the way they pair with wine in a scientific way.
“There is a scientific reason why these foods are an R&D tax creditable investment.”