Benefits of early R&D tax credit claim preparation

Revenue announced that cash payments due on R&D tax credit claims can be made to claimant companies earlier than the legislation has historically allowed. This means that the need to complete R&D tax credit claims and Corporation tax returns as early as possible is more important than ever.

These are uncertain, unprecedented times for businesses operating all over the world. Of course, the primary focus of business leaders is currently the health and vitality of staff and their families as well as the maintenance and ongoing success of the business. However, all business leaders are also thinking about what instruments or mechanisms are available for cost saving or minimisation.

Clearly, there is an immediate positive impact for R&D performing businesses who can avail of this new measure. On top of this, other efficiencies can be driven by preparing R&D tax credit claims in real time. When coupled with the new announcement from Revenue, there has never been a better time to consider how to speed up the process and have claims completed earlier in the year.

• Retrospective claims are more difficult to administer, period. Retrieving information on previously undertaken technical activities can be time consuming and difficult. Adding to this is the human element, i.e. scientific and technical staff having to look back at old activities that are very much not a part of their current day-to-day thinking, can be burdensome and perceived as non-essential.

• Real time (or near real time) claims have at their core better systems and controls for the management and measurement of R&D activities and associated costs. Real time means good governance and better due diligence, underpinned by a clear methodology.

• Where claimants are in receipt of RD&I grants or are in a position to avail of Knowledge Development Box (KDB), then the documentation for all of these benefits can evolve throughout the RD&I life cycle. That is to say, grant application information can be utilised for R&D tax credit claims and further still for KDB.

• Submitting the claim as part of your corporation tax return ensures at least the possibility of receiving payment earlier. Clearly, right now this is of paramount importance to claimant companies and should be the goal of each R&D performing entity.

Gi3 at Deloitte know from talking to R&D performing businesses that the management of the R&D function is complex and ever changing. Adding remote working and the challenges of this environment that we involuntarily find ourselves in, a focus on getting these cost saving initiatives right has never been more relevant.

Gi3 at Deloitte are here to help business in getting to this best in class scenario with your R&D funding. In our experience, there is no one size fits all solution. The factors for one company may be very different to those affecting a similar entity.

Should you wish to talk to our team about any concerns with regard to any of the above, we would be delighted to host you for a discussion via Skype or if things change quickly (unlikely), we would be delighted to welcome you to our premises or to visit you at yours. Our global view, expert teams and best in class approach may uncover significant areas where we can add value, efficiency, accuracy and robustness to your RD&I funding and its processes.

All the best, Gi3 team at Deloitte.