Final call for Scots firms ahead of R&D tax credit deadline

29th March 2023

Scottish firms have only a few days remaining to comply with new legislation that will bring major changes to the way they claim tax relief for research and development activity.

R&D tax credits are an HMRC scheme designed to incentivise investment in innovative projects through research and development. From April 1st, claims will be subjected to higher levels of scrutiny and require additional layers of information – including a breakdown of costs across qualifying categories – while the move to digital submissions will increase speed and transparency.

Now, leading R&D tax credit specialist ZLX Business Solutions has called on companies of all sizes to take action to ensure they are properly equipped for the deadline and can avoid potential penalties.

Commenting ahead of the April 1st deadline, the company’s founder and CEO, Stephen McCallion, warned against non-compliance with an estimated five-fold increase in the number of specialist inspections carried out by HMRC, while fines for companies that make inaccurate or misleading claims can reach up to 100% of the initial tax relief granted.

He said: “With the tightening of regulations surrounding R&D tax credits, these reforms carry the potential to penalise businesses that are either not aware of the new requirements or that have made errors in good faith as part of their claim for tax relief.

“For companies active in R&D, it’s imperative they seek the right professional advice at the earliest opportunity to not only deliver maximum ROI but prevent them from falling foul of these impending legislative changes.

“While it’s pleasing to see HMRC introduce changes designed to improve compliance and extend the scope of the scheme, there are some aspects which could have a detrimental impact on smaller businesses.”

ZLX is led by an experienced management team, including experts in legal, accountancy and technical disciplines, across offices in Glasgow and Aberdeen. It helps clients identify projects eligible for tax relief and navigate the claims process.

The average pay-out from HMRC for an SME claiming R&D tax credits is around £55,000 per annum, and more than 10 times higher for large corporates. With ZLX’s assistance, customers have reclaimed funds from £10,000 to £1.5million through their innovation investments.

Stephen added: “Over recent years, we have built a reputation as a robust defender of our clients against HMRC compliance reviews – in no small part thanks to the investment we’ve made in recruiting our own, in-house specialist legal department, which continues to prove an important differentiator in the market.

“As the go-to experts for tax compliance, our team at ZLX Business Solutions has broad expertise across the full spectrum of legal, financial and technical requirements, meaning we are ideally placed to protect clients’ interests and add value to their bottom line.”

Looking for advice around R&D tax credits and what the new changes mean for your business? Don’t hesitate to contact the experts at ZLX Business Solutions on 0141 739 3377 or email [email protected].

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