It is fair to say that when we started supporting innovative businesses in 2015, how most companies dealt with this tax advantage here in UK really came as a surprise. They fell into three groups:
We provide solutions for all of these scenarios and as part of our mission we focus on creating awareness of this topic among companies in the UK.
In a nutshell, the sort of innovation that HMRC is looking for - and as they plainly put it - is a scientific or technological advance, meaning that you attained knowledge that was not readily deducible by a competent professional.
To better illustrate what we do and what all this is about, we tend to share the story of a SaaS company that became one of our valuable clients a couple of years ago. They are a SME based in the UK that focuses on cloud hosting environments for e-commerce. What they did was not about rocket science nor developing something completely new and from scratch, although they were clearly bringing a technological advance into their industry. They simply took an already established e-commerce platform in the market and enhanced an existing process for e-commerce retailers by taking advantage of cloud technology which reduced costs and complexity for those retailers. This in turn greatly improved the user experience.
Understanding this from our client - not only allowed us to optimise their claim and make it robust for submission - but also allowed us to better cover the key questions that we usually cover when preparing your claim and supporting documentation for HMRC.
Here is also important to explain why they consider the uncertainties to be scientific or technological uncertainties rather than routine uncertainties.
In our client’s case, others experimented but the problem was too complex. For this SaaS company we were serving, it was all about focus and leveraging the principle of lean thinking and continuous improvement and innovation.
There were hosting companies and agencies but no one with the depth of knowledge and the level of automation and processes that our client offers to its clients and primarily this achievement was possible due to the fact that our client has the combination of people with a variety of relevant expertise, skills and experience.
A month after submitting their claim and support documentation to HMRC, this SaaS company was able to get 1/3 of their investment back as tax credit, which they have wisely used to fund their growth and continue innovating.
It should be noted that, beyond receiving similar benefits, there are several advantages of working with companies like us. We have developed a streamlined methodology - optimising the preparation of your claim whilst minimising the time you need to spend on it. This, incorporated into our overall approach, has proven successful time and again.
Needless to mention that HMRC guidelines tend to change - they changed in 2012, in 2013 and then again in 2015. This is another key reason specialised companies like ours - who are on top of these changes - provide value. Perhaps, most importantly is that we charge a fair fee for the specialised work that we do with no fixed upfront fee … meaning if you are successful processing your tax credit, we are successful!
We work with a huge range of different clients to help them identify their R&D and qualifying costs as our experience entails diverse industries. If your company is interested in a free consultation, a member of our team will be happy to discuss your R&D situation with you and whether your company qualifies for R&D tax credits.
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