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R&D Tax Credits in 2021: How to Unlock the True Value of Your Claim

EmpowerRD use technology to guide startups through the process of making an R&D tax credit claim, helping them unlock the full value of their claim, for a fraction of the cost of traditional providers.

You’re likely to be familiar with the R&D tax credit scheme, a lucrative government tax incentive, allowing startups to claim up to 33% of their R&D costs back as cash. The scheme is also at the heart of the Government’s vision for the UK economy post-Covid, with an ambitious target set of raising total investment in R&D to 2.4% of UK GDP by 2027.

Whether your business is claiming for the first time, or has claimed a number of times before, it’s important to regularly assess your claiming methods. Here’s what to look for in an advisor to ensure your claim is maximised, and complies with changes to the scheme being brought in by HMRC this year.

Taking back control from traditional providers

Access to R&D tax credits has relied on advisors sitting at the centre of the process, using traditional methods such as interviews to capture the data needed for the claim, and who often overcomplicate the process to justify their high fees.

Today, a chief finance officer wouldn’t dream of closing their books without a combination of a skilled finance team and a modern finance platform, so it’s surprising how little supporting technology has so far been introduced into the R&D claiming process.

By combining technology with an expert team, businesses can take control of their R&D claim without overreliance on third-parties. Technology can greatly improve the experience of claiming for companies as they grow. The process is far more transparent, and allows the use of data to ensure a claim is benchmarked and optimised year on year. It also reduces the time and effort taken to put together a claim – with multiple team members able to work simultaneously on the necessary details – which ultimately significantly lowers the cost.

Benchmark against your peers to uncover the full value of credit

An R&D tax credit payout is a major event for any growing business, but it’s difficult to know whether your claim really was the best it could be. Was your claim the right size for a business like yours, at your current stage?

Optimising the claim application with a proven process, using data and peer benchmarking allows you to answer these questions. As an R&D specialist, we submit claims every day, and benchmark against other companies within our portfolio to ensure that you never receive

back less than you are due. (We retrospectively evaluated Bloom&Wild’s claim and increased the credit they received from HMRC by 290%!)

Ensure your innovators are contributing to the claim process

It’s crucial that employees who have worked on the R&D projects contribute directly to the claim to build the strongest case, but the traditional process of interviewing an engineering team to collect the data needed for the claim soon becomes a laborious project to manage as a team expands and projects become more complex. Using technology to build a claim means that a whole team can collaborate on the claim to optimise it with the appropriate level of detail.

Our client Birdie switched from their previous provider as the business and their investment in R&D grew. Moving over to a platform for data capture allowed their team of 10 engineers to work collectively on the claim, and build out the details in a more time-efficient way. Another benefit of using a platform is that It also allows their engineers to build their claim throughout the year, collecting data on an ongoing basis whilst the project details are still fresh, thus further improving the quality of the claim.

Avoid HMRC scrutiny

HMRC continually evolves the scheme to improve outcomes for businesses, and 2021 is no exception. A PAYE cap was introduced last April, and compliance changes, for example HMRC hiring an additional 100 claim inspectors and increasing spot checks, have also been brought this year in a bid to reduce fraud.

Being on the wrong side of any rule changes can result in a claim being delayed or reduced, so it’s more important than ever for claimants to ensure that they’re working with a trusted provider who has insight into any forthcoming changes to the scheme.

Get in touch

At EmpowerRD we use technology to guide startups through the process of making an R&D tax credit claim, helping them unlock the full value of their claim, for a fraction of the cost of traditional providers. By combining a team of expert advisors with an industry-leading platform, EmpowerRD makes the claiming process more reliable, time-efficient and cost-effective for innovative businesses, helping them gain on average £16K more credit.

Speak with one of our team to see how much you could claim.
If you’re entirely new to the R&D tax credit scheme, read our full
‘Introduction to R&D Tax Credits’ guide over on the EmpowerRD website.