New tool to help determine whether activities are “qualifying”
HMRC has published a new online tool to help companies decide whether they are eligible to make a claim for research and development (R&D) relief. How does it work and is it worthwhile?
Following a tightening of the rules for R&D relief, including a significant increase in the amount of information companies need to provide with a claim, there has been a sharp fall in the number of claims being made. The department says it is keen to support companies to make legitimate claims, and has now published an interactive tool to help determine whether purported R&D activity is qualifying for the purposes of relief. The guidance notes stress that you will need a “competent professional” to help answer some of the questions. You might think this means your accountant, but it actually refers to someone with expertise in the area the activity being carried on. HMRC says that the following will be indicative that someone fits the bill:
- high level qualifications in the field, alongside continuous professional development;
- a significant number of years’ experience working at a high level in the field;
- a good scientific publication record in the field;
- industry awards; and
- other public recognition for contributions to the field
Where the tool is used, it may help support a claim in the event of a compliance check: “If your answers in the tool are based on your project’s facts and you can clearly support and explain them, we’re unlikely to disagree that it involves R&D activities. If we do, we’ll explain why.”
It is therefore recommended to save or print the result of the test.
Related Topics
-
Selling spare items to your company
You’re short of cash but if you use the traditional methods to take more money out of your company you’ll pay higher rate taxes. Is there another way to extract profits without paying income tax or NI?
-
No such thing as a (tax) free lunch?
You run a small consultancy company and treat your staff to lunch in the office once a week. Your bookkeeper says it’s a taxable benefit in kind because staff lunches are only exempt if they are provided in a workplace canteen. Is this correct?
-
Judge criticises use of fabricated AI-generated cases in HMRC appeal
A tax tribunal judge has criticised the use of apparently fabricated case references generated by artificial intelligence in an appeal against HMRC. The incident highlights growing concerns over the use of AI tools in legal and tax proceedings. What happened?