New tool to help determine whether activities are “qualifying”
HMRC has published a new online tool to help companies decide whether they are eligible to make a claim for research and development (R&D) relief. How does it work and is it worthwhile?
Following a tightening of the rules for R&D relief, including a significant increase in the amount of information companies need to provide with a claim, there has been a sharp fall in the number of claims being made. The department says it is keen to support companies to make legitimate claims, and has now published an interactive tool to help determine whether purported R&D activity is qualifying for the purposes of relief. The guidance notes stress that you will need a “competent professional” to help answer some of the questions. You might think this means your accountant, but it actually refers to someone with expertise in the area the activity being carried on. HMRC says that the following will be indicative that someone fits the bill:
- high level qualifications in the field, alongside continuous professional development;
- a significant number of years’ experience working at a high level in the field;
- a good scientific publication record in the field;
- industry awards; and
- other public recognition for contributions to the field
Where the tool is used, it may help support a claim in the event of a compliance check: “If your answers in the tool are based on your project’s facts and you can clearly support and explain them, we’re unlikely to disagree that it involves R&D activities. If we do, we’ll explain why.”
It is therefore recommended to save or print the result of the test.
Related Topics
-
Corporation tax return filing deadline
-
Don’t overlook the partial exemption annual adjustment
As VAT year ends approach for many businesses, HMRC’s guidance highlights the need to carry out the partial exemption annual adjustment. This is often overlooked but can have a direct impact on recoverable VAT. What do you need to check?
-
Could HMRC recategorise your subcontractors?
You use subcontractors for all your building projects and almost always the same individuals. You’ve heard that this could increase the risk of HMRC recategorising them as employees. What steps can you take to counter this?