RDP Associates
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R&D TAX RELIEF CASE STUDY

CLIENT

A company that designs, develops, and manufactures audio equipment had been making R&D tax credit claims using internal resources. For 2 consecutive years, the claims averaged £40,000 per year in tax savings/cash refunds. Introduced to RDP Associates Inc. (RDP) by one of our accounting firm partners, we carried out a detailed review of the firm’s claims as well as the process undertaken to prepare the claim request.

THE SITUATION

RDP’s Key Findings on the Initial R&D Tax Credit Claim

  • The accounting firm reviewed the BIS guidelines with the client to ensure they understood the 3 main criteria to be met—technological advancement, uncertainty and the concept of systematic investigation and experimentation.
  • The client reviewed their list of development projects and selected eligible R&D projects.
  • The client then prepared a narrative or description of each project for the accounting firm’s review.
  • The accounting firm reviewed the narrative and made some revisions to eliminate ineligible areas or activities.
  • The client supplied information enabling the accounting firm to allocate costs to the eligible projects.
  • The accounting firm worked with the client to gather costs that related to the R&D projects.
  • The accounting firm prepared the necessary tax forms and submitted the tax return and R&D tax credit on the client’s behalf.
  • The claim was accepted and the client received a refund of £80,000, over a two-year period

THE CHALLENGE

  • When RDP and the accounting firm began working together on this existing R&D tax credit claim, we not only reviewed the initial request but also carried out a thorough assessment to determine if the client could obtain additional tax savings. We shared our assessment findings with the accounting firm partner and suggested revisiting the 2 claims that were originally submitted.
  • Below is an overview of how we were able to increase the returns the company received.
  • RDP’s key technology professional, an electrical engineer, met with the client’s key technical staff that identified the eligible R&D projects and activities.
  • Initially, RDP focused on what projects were NOT claimed and why.
  • We realized that even though the client was aware of the BIS guidelines and the eligibility criteria, they had many misconceptions with regard to eligible activities.
  • RDP’s technology professional reviewed the projects in detail and reassessed the claim.
  • Additional R&D projects and activities were identified, new narratives were prepared and the associated costs were allocated.
  • The corporate tax return was amended and the claim was resubmitted along with RDP’s R&D tax claim information package.
  • HMRC reviewed the submitted incremental claims and queried a few items to which RDP replied, thereby alleviating the queries.
  • The revised claims for the two-year period were accepted in full for £232,000.

THE RESOLUTION

Through RDP’s interview-driven R&D claim process, the company received an increase of 190% of the original claim submission! The difference between the two claims was £152,000.

Here are 3 main reasons for the difference between the two preparation methods and the results:

  • RDP’s peer-to-peer approach delves into the scientific work in more detail to fully understand what is being accomplished on a technology level.
  • RDP dispels the common myths behind what qualifies as R&D.
  • RDP prepares over 1,000 claims a year and understands all the nuances, thus ensuring that every eligible project, activity, and cost is claimed.

Contact us to schedule an appointment for a free assessment.

Contact us to schedule an appointment for a Free Assessment. We can help determine your eligibility for tax credits and grants and share more information about innovation funding.

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