As mentioned in some of our previous articles, there are straight forward “low hanging fruit” R&D work that can be identified and analyzed by consultants, this includes reviewing your company’s project lists, due diligence, conducting interviews with individuals, gathering information and documentation, formulating technical narratives and drafting the technical reports. In addition, the consultant prepares and/or reviews the company’s expenditure to ensure that the allocation of costs represent the eligible technical activities (Science Test), this is in parallel with assisting and defending the R&D claims in case of a review by Revenue. These factors alone may already be a good reason to consider selecting an R&D Tax Credit service provider, however there are even more reasons.
Below we have provided an example of how a technical consultant’s involvement improves the R&D Tax Credit claim preparation process and result in a significant claim increase. We refer to these as “high hanging fruit” as it takes an industry expert in the field of science and technology and in R&D to identify and determine such “high hanging fruit”.
Example | Chemical Industry
A company experienced a time-consuming Revenue audit for a claim the company prepared internally. As a result, more than 50% of the claim was rejected. Braithwaite was selected to help with the claim for the following year.
Before the consultant was involved, the work was tracked and presented as many small projects – each for a separate product developed. This could be the correct approach when each product is very different from each other and its development is challenging on its own right, however in this case the products (natural soaps, shampoos. etc.) were presented to the reviewer as having similar challenges and advancements. Therefore, the auditor’s conclusion was that only some out of the many developments were eligible, the others were rejected.
When the consultant reviewed the work to assist with the next claim preparation, they identified through discussion with the project leaders that each of the rejected product developments had their own nuances which were not tracked properly and were not presented to the auditor. R&D is usually not about the final product, but about the process, learning, technological advancement and approach. Based on that, the consultant developed an efficient method to track the process of the work carried out and include the activities as part of the bigger R&D project.
Perhaps if the company used a service provider and a technical consultant for their previous claim, the work/ projects could have been qualified by the Revenue as eligible.
Braithwaite’s technical consultants assist companies with efficient identification and preparation of their R&D work, as well as developing processes for proper tracking of information. However, having mentioned this, identifying and determining R&D work for claim submission involves the experience of a trained professional who is an expert in each relevant industry. Trust the R&D experts at Braithwaite Ireland with your next R&D Tax Credit Claim by contacting us today.
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