How Accountancy Practices Can Also Benefit From R&D Tax Credits
R&D Tax Credits aren’t just for your clients. In fact, any UK limited company can make a claim if innovative work has taken place. Find out more.
Could your firm be eligible?
Launched two decades ago, the research and development (R&D) Tax Credits scheme is a government-back tax relief that helps companies to cover the costs of growth and innovation. Essentially, if a limited UK company has created a new product, service or process from start to finish, or has worked to upgrade an existing one, then the award will likely be available.
This support is highly worthwhile too, with SMEs able to receive back up to 33 pence for every £1 of R&D expenditure. The benefit is received either as a reduction in a company’s Corporation Tax liability, or in cash payments for those that made a loss.
What makes an R&D project eligible?
We really want to emphasise this point - R&D Tax Credit eligibility is not based on the size of the company, or the industry it operates in. It’s entirely about the technological and/or scientific advancement that the project looks to solve. If there was a financial risk incurred in the course of this project, then that’s a key indicator of R&D tax relief eligibility.
The acid test really is the element of uncertainty, and the experimental and research activities that took place to try and resolve it. It should demonstrably go beyond any existing technologies, and the R&D work should benefit not just the company itself but the wider field.
It’s open to just about everyone - including accountancy firms
The even better news is that as research and development occurs in all sectors, and across businesses of all sizes, the R&D Tax Credits scheme is open to all. From manufacturing to engineering, IT to retail, construction to pharmaceuticals - simply about meeting the criteria (as outlined on our R&D Tax Credits page).
Applications can be submitted up to two years following the end of the accounting period during which the R&D costs were incurred. Claim sizes vary massively, with many worth tens of thousands of pounds. As long as a technological or scientific challenged was addressed - the solution to which was not easily deducible by an expert in the field - then R&D Tax Credits could well result. It doesn’t even matter if the project was ultimately abandoned or failed; it’s about the journey of scientific/technological discovery, rather than the end result.
Relevant R&D examples in accountancy
R&D Tax Credits are all about innovation. There are many technological advances in the financial sector that continue to evolve, transforming the way accountancy firms conduct their business. They include:
1. Cyber security
Cyber attacks are thought to cost the UK economy over £34 billion a year. Not only do they bring huge stress and cost, they can also have legal implications - not to mention any reputational damage. Viruses, malware and data theft are common, and are a substantial threat to accountancy firms particularly.
New solutions are constantly being launched which firms will need to keep an eye on (and invest in). These serve to protect sensitive client (and business) data, offering improved detection, firewalls, storage and back-up options.
This issue is also particularly pertinent at this time with many people working from laptops at home.
2. Dynamic software that increases efficiency
Again, software is an area that’s continually evolving with much of it working to automate regular tasks and reduce operational costs. This software typically performs a variety of functions, including data entry, generating reports, the preparation of financial data and performing tax operations efficiently and accurately.
3. Cloud-based accounting
With more of us than ever working from home, cloud-based accounting has become a hot topic. Accountancy firms, as with all businesses, need to embrace this technology in order to offer remote, 24/7 access that will boost efficiency and competitiveness.
Access can be obtained using any internet connected device, allowing for constant collaboration between accountants and clients. This provides not only a better service but improved security too.
Why should accountants partner up with the R&D funding specialists at Myriad Associates?
At Myriad Associates we understand that every practising accountant has a huge amount on their plate. Tax advice on its own covers a broad spread of knowledge, and it’s simply not possible to be an expert in everything.
Our team specialises entirely in R&D tax relief and funding. We have also spent many years building and nurturing robust working relationships with accountants across the country in a way that suits their firm and clients. This means that accountants themselves can offer a more rounded R&D tax relief service with maximum support from us.
The fact is that R&D Tax Credits, Patent Box claims and Capital Allowances are highly complex, niche areas of accounting. It’s also uncommon for accountancy firms to employ an R&D funding team in-house, which is where our flexible, independent (remote) support is ideal.
The Myriad Associates team will work with you on all R&D claims from start to finish, and we’re proud of our 100% success rate.
Should you decide to work using the Tax Cloud portal for accountants to complete your clients’ R&D Tax Credits claim we’re pleased to offer a generous partner package.
The fee is based on a 30% revenue share model. So as an example, if your client's eligible R&D expenditure is (for illustrative purposes) £100,000, their Corporation Tax Savings (CTS) will be around £24,700. Then take off the Tax Cloud fee (set at 5% of CTS so in this case £1,235) and your share will then total £370.50 (30% of £1,235).
With the Tax Cloud portal you can also receive a commission simply for being an introducer. As an introducer partner you will receive a 15% referral fee of the net invoice.
Get in touch
Would you like to understand more about partnering with us? Perhaps your own firm has recently undertaken an R&D project and you like to find out more about making a claim for R&D Tax Credits?
Our expert advisors are here to help. Simply call us on 0207 118 6045 or send us a message so we can get back to you. We're working remotely as usual throughout the pandemic and will be pleased to hear from you.