The risks of ‘self-certification’
Any R&D claim handled by a firm without specialist technology experts is always going to be a self-certified claim.
This is where you start to encounter problems, particularly in the area of validating what is R&D or not, potentially missing out on eligible projects and certainly in terms of compliance with HMRC guidelines."
Statistics, as we all know, can be very misleading. With R&D Tax Credit claims, the most recent HMRC statistics show that, in broad terms, over 40,000 SMEs are claiming, with an average claim value of c£50k.
However, when you look into this average you see that over three quarters of these companies are actually claiming at or below this level. Conversely, almost one quarter of companies are claiming above the average – in many cases substantially. It doesn’t take a rocket scientist to realise that the larger the claim, the more complex it is likely to be.
Similarly, around one quarter of claims are made by companies operating within the SIC code classified ICT sector – a name that really does not do justice to a dynamic and vital sector that includes high growth technologies and markets such as AI, Digital Security, Fintech, Edtech, Healthtech, to name but a few.
So, when it comes to deciding how best to process your sizeable software claim, you essentially have four options:
- Get your accountant to do it
- Get one of the many advisors in who will ‘specialise’ in anything that will earn them a fee!
- Get a software R&D Tax Credit specialist in who has technology experts who understand your business.
The big difference between the first three options and the fourth is that any claim made via those three is always going to be a self-certified claim. You are essentially responsible for identifying all eligible activity and ensuring compliance with HMRC regulations.
How to avoid self-certification
At MSC R&D, we live and breathe software technology. So, it stands to reason that our technical and financial experts are highly qualified and highly experienced and passionate about technology.
Add in the facts that they are trained by Gavin Bate, the guy who wrote the R&D Tax Credit HMRC manual, and our processes are underpinned by our commitment to quality (ISO9001:2015; EFQM R4E), and it is no surprise that our growing client base consists of hundreds of leading R&D driven, software related businesses, who rely on us to prepare the claim and take full responsibility for it.
Software is a very fast-moving sector and, unlike most others, HMRC rules on qualification criteria change in line with this. So, having an advisor who really understands software, makes it their business to keep up with trends, and thrives on complexity, has to make sense if your claim is significant.
Back to statistics. There are dozens of so-called R&D Tax Credit claims ‘experts’ out there offering the same service to everybody. In reality though, there are only a few capable of delivering the service a large claim requires, and none as expert as MSC R&D when it comes to software claims.
Add our fast-track processes into the mix and the phrase LESS PAIN - MORE GAIN springs to mind!
You don’t have to be far out on a big claim for it to hurt – why not give us a call on 0114 230 8401.