In an article published today, the Times newspaper has lifted the lid on some of the questionable practices that many in the R&D Tax Credit advisory field have known about for some time.
The Times describes R&D Tax Credits as “a scheme plagued by waste” that “has handed out millions of pounds for scientific ‘innovations’ like vegan menus”.
It goes on to highlight R&D claims that have been made for:
- a launderette that offered to lower temperatures on its washing machines
- a business that recouped money for staff performance reviews
- installing bicycle sheds at a client’s office
- a call centre manager recording conversations between a customer and agent, and reviewing their performance
Examples of YouTube videos are cited where accountants and advisors encourage companies to consider making R&D claims for wacky projects.
Paul Cheetham-Karcz, managing partner of the accountancy Sedulo, said in a YouTube video that bars and restaurants were “categorically” eligible for the schemes because of the “uniqueness” of their offerings.
“That uniqueness has been researched as a result of research and development; that might be cocktails, probably your menu is completely different than anybody else’s menu, it might be a twist on something, but that twist is the development of your menu,” Cheetham-Karcz said in the video about tax breaks, published in January last year.
“R&D grants are available in the leisure industry, and that’s a fact because we’ve got them. So make sure that you’re looking at them because that is free cash from HMRC back into your bank account.”
According to Radish, an accountancy and tax credit advisory firm, a pub in Chester called the Coach House Inn successfully claimed £28,035 across two R&D tax credit claims for adding vegan and gluten-free options to its menus.
Another adviser, Mitch Hahn of Nordens Chartered Accountants, claimed in a YouTube video that the schemes represented “free money that the government are giving away” and urged companies that “even if you think 100 per cent you do not qualify for R&D, at least go through the process”.
An HMRC spokesperson defending the scheme said: “We have prevented significant organised criminal attacks and fraudulent abuse of the R&D tax reliefs and are continuing to step up our monitoring of claims for fraud.
“Claims are checked for suspected fraud and since April 2022 more than 1,600 claimants have been asked for more information to validate their claim. More than 80 per cent of these claims have not been paid out as a result of checks.”
Nevertheless, the article will come as no surprise to most R&D advisors.
It can be seen here.
Content by Rufus Meakin.
Find the full article here
