R&D claims need to be submitted early

HMRC is warning businesses to submit research and development (R&D) claims as soon as possible to avoid a delay in receiving payments between December and January

A short review,

Projects that count as R&D

The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It cannot be an advance within a social science - like economics - or a theoretical field - such as pure maths.

The project must relate to your company’s trade - either an existing one, or one that you intend to start up based on the results of the R&D.

To get R&D relief you need to explain how a project:

looked for an advance in science and technology
had to overcome uncertainty
tried to overcome this uncertainty
could not be easily worked out by a professional in the field

Your project may research or develop a new process, product or service or improve on an existing one.

Types of R&D relief

Small and medium sized enterprises (SME) R&D Relief

You can claim SME R&D relief if you’re a SME with:

less than 500 staff
a turnover of under 100 million euros or a balance sheet total under 86 million euros

You may need to include linked companies and partnerships when you work out if you’re a SME.

SME R&D relief allows companies to:

deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss

Between December 2021 and January 2022, HMRC expects to be dealing with higher volumes of R&D claims. The tax authority said it was committed to processing 95% of R&D tax credit claims submitted online within 28 days of receipt, but could take longer during the peak period.   

The 28-day processing aim does not apply to:

claims not filed by the electronic portal; and
claims where BACS details have been omitted or incorrectly supplied.

Businesses are also advised to not chase the progress of claims due to pressure on HMRC services.

Comments

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

Transport department officials have begun work on «Project Silverlight» suggesting the highspeed rail scheme might face four additional years of delay. The planned High Speed 2 rail line faces further delays of up to four years and more cuts to the project under plans being drawn up by ministers to rein in its ballooning costs. The extra delays to the country’s biggest infrastructure project would mean that it would not be completed until as late as 2045 — 12 years after originally planned. «This is a function of inflation; we are having to find huge savings because the cost of everything the department is already doing will have become so much more expensive by then,» said one government official. In October, the FT reported that the Treasury had asked HS2’s management team to identify potential cuts or «scope reductions» to the high-speed line. Transport department officials have subsequently begun work on Project Silverlight aimed at fi...

Doubt on CS's collateral.

Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...

Small business will be excluded from fraud law.

Ministers are planning to exclude small businesses from anti-fraud legislation by narrowing the scope of a criminal offence targeting companies that fail to prevent economic crimes. MPs and anti-corruption campaigners had hoped the government would seek to amend the economic crime and corporate transparency bill to ensure the new offence covered all companies. The plans to limit the scope of the amendments will also disappoint those who had hoped the legislation would remove key hurdles to the prosecution of white-collar crime. A new «failure to prevent» offence for fraud would bring it in line with existing similar corporate offences for bribery and tax evasion. At present, prosecutors need only prove that organisations lacked «reasonable» or «adequate» controls to pursue the offence in bribery and tax evasion cases. «It would be much more sensible for the government to provide strong guidance for SMEs on what these proce...

Search This Blog