Time for a New Quote?

Do you get a new car insurance quote every year? Why not get a new R&D quote?

Time for a new R&D Tax Credit Quote?

So, your company is already claiming R&D Tax Credits, but you are coming to the end of the contract with your current R&D Tax Credits provider and you ask yourself, “What next?”

When you come to the end of your car insurance term, your current provider usually sends you a renewal quote a few weeks in advance of the actual termination date, hoping that you will renew with them. It’s a well known fact that many millions of people just allow the auto-renewal process to renew their car insurance without bothering to shop around. As a result, 6.7 million drivers were caught by a “Loyalty Tax” and paid an additional £1.9 billion for the privilege (Aug 2020, GoCompare). An estimated 21% of car insurance policies auto‑renewed in 2020 and all of those people probably paid over the odds.

When it comes to renewing your R&D Tax Credits contract, you have two choices open to you; do nothing and remain with your current provider or shop around for a cheaper alternative. However, cheaper may not necessarily mean better service. What are you actually paying for when you pay a R&D Tax Credit company to prepare your claim?

Ultimately, you are paying for a good quality, robust claim that is defensible should HMRC come knocking because they want to investigate your claim.

There are various options when it comes to selecting a R&D Tax Credit company to prepare your claims; the “one man band”, your accountant, the SME claim providers or one of the large claim providers. All of these options came with differing prices and levels of service.

The “one man band” is probably going to be the cheapest option (10%-12% of claim value) as they will have virtually no overheads. The quality of the service that they provide will vary greatly, so it is wrong to tar them all with the same brush, but some will be better than others. However, as a single individual offering the service, how can they guarantee a good quality, defensible and robust claim if they do not perform any type of independent review of each and every claim? Additionally, would the “one man band” stand at your side and assist you in the defence of a claim should HMRC come knocking?

Your accountant may very well provide a R&D Tax Credit claims service, but unfortunately, not all accountants are fully versed in all the HMRC rules and regulations involved with R&D Tax Credit claims. Consequently, they often fail to maximise the value of the claim. Again, the accountants may not conduct an independent review of the claim before submission, it depends if there is someone else in the practice versed enough in R&D Tax Credits to be able to review a claim. Should HMRC come knocking on your door because they want to investigate your claim, in all probability your accountant will stand by your side and assist in the investigation. However, they might not have sufficient knowledge and experience to assist in that defence, which might be why you find yourself in an investigation with HMRC in the first place.

Price wise, the R&D Tax Credit SMEs usually sit somewhere between the “one man bands”/accountants and the large claim providers. They are able to do this because they have relatively few overheads. Generally, the SME providers know all the rules and regulations so they are able to maximise the value of your claim. In addition, depending upon the company, they will conduct an independent review of the claim before submission and if they are any good, then they will be by your side should HMRC decide to investigate your claim.

The large R&D Tax Credit claim providers are good at what they do, that’s why they have got so big. They know all the rules and regulations and are able to apply them to maximise claim value. They will more than likely perform an internal review of your claim before submission and in all probability they will stand by your side during an HMRC investigation. Unfortunately, a large company will have large overheads and that will be reflected in the price that they charge, usually somewhere between 25% to 30% of the claim value.

Remember, when shopping around for a R&D Tax Credit claim provider, do not be swayed by just the price charged for the service. Ask if the company conducts an independent review of each and every claim before submission and confirm that they will be by your side should HMRC investigate a claim. 

At the end of the day, you are paying for a quality service from your R&D Tax Credit claim provider and the old adage “the bitterness of poor quality remains long after the sweetness of a low price is forgotten” is still true today!