Whether you are a start-up company or an organisation that has been growing, tax relief can always help you with cash flow and incentives to invest in future research and development (R&D ) projects. One question that we are often asked is what to expect as a first-time filer and how the claim should be approached. Braithwaite recommends a systematic process to establish the foundations of an R&D claim and especially emphasises understanding Revenue’s requirements.
Below we have outlined some questions a first-time filer may have.
Preparing an R&D claim in-house vs. working with a consultant
Many first-time claimants may have the question of whether to prepare the claim in-house or whether a consultant should be involved to assist the filing. Although involving consultant may incur a service fee, as a first time filer the years of experience a consultant can often bring a proven methodology to collect and prepare the information needed for a claim. As an engineer or technical lead, you should focus on your daily job to work on your projects/products rather than spending too much time developing a new methodology for an R&D claim. Depending on your industry and internal structure, preparing for an R&D claim can sometimes be cumbersome and we can offer the assistance to design a streamlined process for you.
What to prepare for an R&D claim?
While working with many first time filers, we find the claimants are often not aware of what needs to be prepared to submit a claim. With the Braithwaite approach, we will ensure the completion of technical and financial reports before submitting a claim. This will not only provide sufficient information for your filing, but also the information required to address Revenue queries.
For examples of the types of documentation needed to support a claim go to: https://braithwaite.ie/rd-tax-credit-supporting-technical-documents/
Setting up your claim process
We often find a gap in understanding the R&D program eligibility and requirements for claimants who either prepared the claim in-house or did not work with us before. The first claim usually sets up the process for a team to claim R&D tax credit for the current and upcoming years. Therefore, it is important to establish a consistent understanding of the program across the team, which will make the information collection a lot easier for the first time filer. Braithwaite provides education sessions for first time filers and on-going training sessions when needed or if there is an update from Revenue. With a successful first R&D claim, it often provides Revenue with a track record of compliance to reduce the risk of an audit.
Are audits common for first-time filers?
Although Revenue does not publicly differentiate the claims submitted by first-time filers and experienced filers, first-time filers often have a higher risk profile due to lack of track records. For this reason, it is recommended to engage a consultant who will support you when an audit happens. The claim is assessed by its supporting documentation and an onsite audit happens when some additional clarification is needed. However, due to lack of filing experience, first-time filers usually require more assistance in preparing for the audit meeting. Braithwaite is able to assist given our experience with audits.
For more information on how we can work with you please feel free to contact Braithwaite today.