HMRC Portsmouth Open Day Article Image

HMRC Portsmouth Open Day

On the 15th July our R&D team headed down to Portsmouth to attend an Open Day with HMRC at Lynx House. The day intended to educate and update R&D Tax Experts on changes in legislation and the current state of affairs.

Grants

  • Revised CIRD81670 will be posted soon.  HMRC are still considering whether EIS/SEIS should be classed as de minimis aid
  • Grant companies need to give more information to clients and us, e.g. Innovate 

RDEC

  • HMRC have received a massive increase in claims recently.  The 28 day turnaround does not apply for RDEC, only for refunds
  • SMEs in receipt of grants can claim under the large company scheme, which means they are then able to access RDEC
  • Universities and charities will no longer be able to claim RDEC
  • There is no set policy for recognising ‘above the line’ credit in the correct accounting period.  There are no penalties for disclosure error.

Advanced Assurance

  • Assurance for first time claimants for first three years of claims, but only for firms with a turnover of up to £2M and up to 50 employees
  • Single or group applications are allowed
  • Online application process.  Follow up call from HMRC
  • Aims: to raise awareness of R&D and to improve quality of claims
  • Seems to work as pre-approval, which reduces workload for HMRC
  • Assurance for R&D, NOT clearance
  • This is currently a pilot scheme with the full process due online in the Autumn
  • It is not yet known what happens if a client fails the advanced assurance process.

Reimbursed Expenses

  • Does not now form part of the staffing costs, but consumables used for R&D purposes do (even if reimbursed to staff).  For example, travel costs are not eligible.

Software

  • This is a hot topic for HMRC.  They are receiving a huge increase in software claims – 60,000+ so far in 2015/16
  • They say it is difficult to assess whether R&D is taking place.  Portsmouth HMRC have two IT specialists to help, but stress that they are not considered as competent professionals for the purposes of the claim, they just bring more expert knowledge.  HMRC also often refer R&D reports to Chief Digital Information Office (CDIO), which creates a timelag for some of the larger, more complicated software claims.  The CDIO link is only a trial at present
  • It is essential to identify - clearly signpost - what the advance is when making software R&D claims, including the uncertainty and why it is not readily deducible.  It should not only increase the companies knowledge
  • We cannot claim for hosting costs
  • See CIRD 81960.

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