Now more than ever businesses are relying on their accountant’s advice and support to help them find a way through the business and financial challenges brought about by the pandemic. Ian Batkin, partner at Luvo Financial, is encouraging accountants to remember Research and Development Tax Relief, which can give clients a quick and easy way of generating cash – and help their clients to maintain sufficient cash flow.

Cash flow during the pandemic has been a particular challenge for some businesses, especially those who have had to close their doors and/or furlough staff for significant periods of time. Many have been forced to adapt and diversify, developing new products and services, almost by accident, to help them survive – they have simply just rolled-up their sleeves and got on with it.

For some of these businesses, adapting has involved the investment of time and money in innovative activity that could be eligible for Research and Development (R&D) Tax Relief, also known as R&D Tax Credits.

R&D Tax Relief – are my clients eligible?

If your client has invested time and money into developing new products, processes, services or systems, or indeed enhancing existing ones, it is likely they are eligible to submit a claim.

There is a common misconception that the relief is only available to business involved in science-based research and development, which is not true. Luvo Financial has helped companies from a variety of sectors – including science-based and pharma companies, but also manufacturers, engineers and service sector firms – to make successful and financially valuable claims.

To be eligible to claim under the SME R&D tax scheme, a business needs to:

• Be undertaking and standing the cost of eligible qualifying R&D
• Have less than 500 staff
• Have either a turnover under €100 million, or a balance sheet total under €86 million.

Many businesses do not realise they are eligible for R&D Tax Relief. In fact, it is estimated only 10% of UK SMEs who are eligible to claim actually do so.

Claiming R&D Tax Relief under the government’s SME R&D Tax scheme can provide SMEs with a minimum 25% cash return on any R&D expenditure, rising to 33% for loss-making businesses. Claims are normally processed within four to six weeks and the cash is paid directly into a bank account.

How Luvo Financial can help

Luvo Financial is an independent firm that supports accountants with its speciality – R&D Tax Relief claims – for their clients. We work on a contingent (no-win-no-fee) basis, our fees are competitive and we only support claims where there is clear eligibility to claim. We are proud to have a 100% claims success record.

As well as being experts in our field, we are highly experienced in supporting accountants and helping you to strengthen your relationships with clients. We don’t provide any other accountancy services, so you can rest assured that we won’t be after your client’s other accountancy, tax or audit work.

If your client is eligible to claim, we will prepare and provide the necessary documentation and the claim will be submitted by you. We’ll even show you exactly which boxes to complete and how to submit the claim if needs be.

If you would prefer it, then Luvo Financial can work directly with your clients on this special area of tax relief; we operate a generous, guaranteed fee in return for accountants referring us and introducing us to clients, whether we work for them directly, or become a ‘virtual member’ of your team behind the scenes as your own specialists in R&D Tax and Patent Box advice and solutions.

Rest assured, Luvo is committed to creating and nurturing strong working relationships with accountants, and our team is fortunate to have worked with many since the firm began about 6 years ago.

Taking a pro-active approach

We urge accountants to take a proactive approach to addressing their client’s eligibility to claim R&D Tax Relief and, as appropriate, Patent Box. We have seen a number of accountants lose clients to other companies who inform them they are eligible to utilise tax relief schemes, support them in doing so, and then persuade them to hand over the rest of the accountancy and audit work. We want to help you to avoid this scenario. Our only aim is to support you to provide the necessary advice and assistance and to ensure your client doesn’t miss out on significant tax savings and the valuable boost to their cash flow.

To find out more about how we can support you and your clients, please don’t hesitate to call or email us for an initial, confidential chat. It may just provide your client with the cash boost they need to get through the next few months and help you retain your clients