R&D Mythbusting with RIFT

With 2017 coming to a close it’s time to step back and check exactly where we are. The good news is that word is continuing to get out about Research and Development Tax Credits. More claims are being made and the amounts are going up. What’s not so great is that, even though more companies than ever have heard of the scheme, so many just don’t understand that it applies to their work.

Latest Constructing Excellence members RIFT take us through some of the myths surrounding R&D.  In some cases firms are simply falling for one of the widespread myths that RIFT is fighting so hard to kill off. Let’s take a moment to knock out a few of most common, and damaging, false R&D beliefs out there:

Myth #1: if you’re not wearing a white coat and holding a smoking test tube, you’re not doing R&D

R&D is about solving problems through innovation. Whatever business you’re in, if you’re finding new, better or cleaner ways to accomplish something, you’re doing R&D.

Myth #2: claiming R&D Tax Credits means giving your secrets away for free

Making a claim for R&D Tax Relief does involve some HMRC paperwork. Like any other kind of tax relief, you’ve got to prove that you’re owed money to claim it back. As part of that, you need to explain what you’re trying to do and what problems you’re solving along the way. However, there’s no need to disclose confidential information to make your claim.

Myth #3: if your project fails, you can’t claim for it

The truth is that your claim is still valid even if the projects it covers don’t succeed. HMRC’s looking at the bigger picture with this scheme. The more companies in the UK are working on solving problems and making advances, the better. Sometimes, that work will pay off and sometimes it won’t. Win or lose, every project is valuable because even failed experiments teach crucial lessons.

Myth #4: R&D claims are more hassle to make than they’re worth

According to HMRC’s latest figures, an average R&D Tax Credits claim for a small or medium-sized enterprise comes to £61,500. We will leave you to decide whether that’s worth a few hours work or not.

R&D: the bottom line

To put it simply, ask yourself these basic questions about the work you’re doing:

  • Have you heard of R&D Tax Credits but assumed that they don’t apply to you?
  • Have you been told by an adviser that you don’t qualify? Did they say you were in the wrong industry? Did they offer this advice without a detailed understanding of your day-to-day activities?
  • Is your business working to improve what it does and how it does it? Are you determined to be more efficient, faster, greener or less costly than the competition? Are you working toward all this with an eye on maintaining quality?
  • Do you regularly have to tackle technical challenges through trial and error to complete your work?
  • Are you adapting existing technologies or techniques to get what you need from them at the right price?

If you’re answering yes to questions like these, you could well be eligible for an R&D Tax Relief claim. RIFT specialise in helping companies through the process of claiming R&D Tax Credits.  With a construction industry specialism they are able to combine sector-specific knowledge with an in-depth understanding of HMRC.

 

One thought on “R&D Mythbusting with RIFT”

  1. We are trying to build smart IT, AV and HVAC systems within offices and other commercial builds. Often the solutions are gleaned from different sources and have to be pulled together into one holistic solution. This is R & D on the fly and we could do more to ensure our solutions are shared to a wider audience. The problem is the pace of change is so great that there are even more favourable solutions coming along and rendering ours outdated within months.
    Barnaby Kirsen
    Bristol Builders Network

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