Leicestershire-based creative business

We were asked to assist a small Leicestershire-based creative business in a highly niche manufacturing sector, who were subject to an HMRC R&D enquiry. Upon assessment, whilst clearly eligible, neither an appropriate report had been filed, nor a summary of qualifying costs. Additionally, upon review the value being claimed included costs not eligible for R&D Tax, and the value was also much higher than industry norms.

Due to the lack of appropriate paperwork we assisted the client and Accountant in the preparation of the claim in line with HMRC guidance. Furthermore, due to the lack of due care and attention in the claim preparation, perceived by HMRC, they considered enforcing penalties. We assisted the Accountant in all dialogue with HMRC, which fortunately resulted in penalties being dropped on this occasion.

Both client and Accountant were happy with the result, even with the reduced tax saving, recognising the need for specialist advice going forward.

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