It is no surprise that the engineering sector is one of the most widely claimed industries for R&D tax credits; whereas many sectors are unaware of the incentive or wrongly believe they do not qualify, many established engineering firms are familiar with the benefits of the R&D mechanism.
However, while lots of organisations in the engineering sector are recovering their costs through the incentive, their recovery is often a fraction of what they are entitled to.
From our experience, we’ve found companies in the sector are identifying “obvious” R&D expenditure, such as staff costs and material costs, but many less obvious costs are erroneously excluded.
Also, in many instances, applications are submitted without a supporting report detailing the R&D activity. While it is not a requirement from HMRC to provide this supporting information (unless the application is queried), submitting an R&D application without a report can expose the company and increase the likelihood of a query.
If you operate in the engineering sector, and are unsure whether you’re getting everything you’re entitled to, without exposing yourself, ask these questions;
- Has what qualifies and what does not qualify been explained?
- Do I have a robust technical report that details my activity?
- Have I been guided through the process of identifying eligible expenditure?
- Will the application be defended in the event of a query?
- Do the costs I’m recovering seem reasonable in comparison to my R&D activity?
If any of these questions are answered with a no, you may not be benefitting from the full breadth of the R&D incentive. If this is the case, please do get in touch, one of the team would be more than happy to assist!
If you believe you are still leaving money on the table or would like a FREE review of your existing application, fill in the contact form below and one of our team will be in touch!
