Case Study
A fast-growing SME in Fintech that specialises in Big Data
Business Pains
HMRC opened an enquiry on the company's R&D Tax Relief claim threatening to throw out the entire claim.
HMRC was questioning the eligibility of some of the R&D work and the server and cloud computing costs that had been included under the software cost category.
The company's accountant put together the claim and they, as well as the company, it seemed did not fully understand the intricacies of the scheme, the definition of R&D for tax purposes, nor how best to present the information to HMRC.
Premise
The company engaged MMP to manage and resolve the enquiry in a timely fashion.
MMP's engineers carried out rounds of technical interviews with the client's development team to collect additional information to answer HMRC's questions.
Using this information and its expert knowledge of the R&D Tax Relief scheme guidance, MMP formulated a detailed and considered written response to HMRC's enquiries and with approval from the client, submitted this to HMRC on the company's behalf.
MMP's understanding of the technology and their deep knowledge of the R&D Tax Relief scheme and guidance, meant that MMP's response to HMRC was specifically tailored to resolve all the inspector's questions. It also took the burden of preparing a response away from the client's development engineers.
Proof
HMRC raised the potential for a penalty against the client because HMRC felt that the original claim put together by the previous advisor was ill informed. Through detailed conversations with the inspector MMP resolved this.
HMRC subsequently, closed the enquiry and paid out the R&D Tax Credit claim with no further attrition nor the prospect of a penalty.
MMP's detailed review of the software costs and rebuttal to HMRC's assertions led to the inclusion of the correct cloud computing costs, resulting in a substantial pay out to the company.
The company was thrilled with MMP's performance whilst handling the enquiry and as a result awarded the ongoing R&D Tax Relief work to MMP. The company has not had any further enquiries from HMRC.
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“We used our accountants to prepare our R&D claim. Unfortunately, HMRC were not satisfied with the explanation of the technology nor some of the costs in the claim so opened an enquiry. Our accountant prepared a response, yet HMRC were still dissatisfied.”
“We chose to engage MMP a specialist advisor who first conducted a thorough analysis of our technology and costs and were then able to resolve the matter satisfactorily with HMRC, getting the claim approved.”
“We went on to use MMP again for the next claim and were pleased that we did. The process was very smooth and we couldn't fault anything. They were great to deal with and we received our rebate without delay and with no fuss whatsoever.”
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