FAQs - Common Misconceptions
What Does LUVO mean?
Luvo is Latin for ‘To help and to aid’ which embodies our ethos here at Luvo Financial
What are the Tax benefits of an R&D Claim?
There are three main types of tax benefit that arise from a successful claim for R&D Tax Relief – these are 1) a payable cash credit, 2) a rebate of corporation tax and 3) an enhanced deduction that can be carried forward.
What about previous years?
You can claim R&D Tax Relief for the previous two full years (your financial years, not ‘tax’ years).
How many of your claims have been enquired upon?
To present, 1% of our claims have been enquired upon by HMRC, these enquiries were promptly resolved with a claim still being processed as normal.
R&D project unsuccessful?
It does not matter if your project was unsuccessful, it’s the R&D activity that is important and not the outcome.
Claiming is risky and may lead to broader tax investigations
With specialist advice and guidance, it is highly unlikely that an enquiry would be raised on your R&D claim. The scheme is a Government scheme, introduced to encourage innovation and R&D activity within small UK businesses, therefore, if filed correctly – there should be no issues with claiming and certainly no impact on other areas of taxation.
HMRC do not want claims to succeed so make it hard to qualify
R&D Tax Relief is a Government scheme, whereby small UK businesses are encouraged to innovate and invest in R&D activity. HMRC want claims to be successful for these reasons. With specialist advice, you can avoid (uncommon) enquiries into R&D claims by ensuring the correct, qualifying costs are claimed.
We need to own the IPR in order to claim
Unlike a number of years ago, this is not the case anymore for making an R&D Tax Credit Claim. You do not need to own the IPR to claim.
We are too small to claim
There is no de minimis number of employee’s when claiming R&D Tax Credits.
We are just subcontractors, so cannot claim
If you are standing the commercial risk and financial cost of the R&D work, you are eligible to claim relief.
Programming is not R&D
Most development work undertaken using IT, is potentially eligible for claiming R&D Tax Credits
Our employee's must include PhD / highly qualified people
You do not have to employ highly qualified / PhD level people to be eligible to claim, a wide range of employee’s can be involved in R&D activities