Con artists do seem to be the most creative of the criminal world, always staying current with their latest scams. There has been a rise in those purporting to be R&D Tax Relief experts. You need to be very careful whose advice you follow as, not only can they con you out of money, they can leave you in significant trouble with HMRC.
What is the R&D Tax Relief scam?
A partner at Campbell Dallas, Mark Pryce, is ringing the alarm bell. As reported in the Scotsman, he said he had found a growing number of instances where “overly enthusiastic salespeople and cold-callers can exaggerate what should be considered as true R&D within the spirit of the scheme. Some have incorrect suggestions on what might qualify to encourage potential clients to sign up to their commission-based fee engagements. It is easy enough to set up as an R&D tax relief ‘expert’ without much governance or compliance. We need to see more protection being offered to companies to ensure they will be dealing with experienced R&D tax credits consultancy firms who are well equipped with technical and professional competence, as well as high ethical standards, in this complex area of tax.”
There is also the double whammy of HMRC’s increased investment in thwarting tax evasion and avoidance. This includes increased scrutiny during HMRC investigations and significant penalties for incorrect R&D Tax credit applications. The government have invested £2.3 billion in the R&D Tax Credit pot, which is great news for innovative companies. But the proviso is that it is apportioned fairly and there will be consequences if it looks like you may have made a fraudulent claim. This is why it remains crucial that you get independent R&D Tax Credit information from real professionals.
Scott Henderson, managing director of Jumpstart, supported this assessment of the current situation, saying: “There are many highly knowledgeable R&D advisers in the market providing invaluable guidance for clients and helping them recoup significant tax breaks for their investment in innovation. There are, however, also a number of mushroom companies operating in our sector with low professional standards. Not only do they threaten the reputation of our sector but they can also have a detrimental impact on the businesses they advise.”
Mark Pryce reportedly feels that a governing, regulatory body for R&D Tax Credit experts would protect both the taxpayer and the genuine advisers working in the industry. We’ll have to see if this proposal is taken seriously at government level. In the meantime, be wary of any unsolicited calls from self-proclaimed ‘R&D experts’ that say they can definitely get you thousands in R&D tax relief. They cannot be certain of any figure until they have carefully examined several elements within your business in conjunction with R&D regulations. Any unsolicited advice should be taken with a degree of suspicion, particularly if money is promised outright. Our R&D Tax Credit experts have a range of qualifications and are regulated by the appropriate professional bodies.