Operators risk missing out on thousands of pounds of tax relief by failing to use an HMRC scheme which rewards companies that invest in IT systems, Research and Development Specialists (RDS) are warning.
The HMRC Research and Development Tax Scheme aims to encourage business innovation by helping companies bring new products and services to market, including bespoke IT systems. It is open to businesses of all sizes.
RDS, which is campaigning to raise awareness of the tax scheme among hauliers, estimates that there are thousands of operators who are missing out on substantial tax relief because they are unaware of the scheme’s existence or that they qualify for the scheme.
The tax specialist recently worked with pallet network Pall-Ex Group to help it navigate the scheme to apply for tax relief on its investment in its bespoke IT system, which amounted to £292,782.51.
Mark Joyner, RDS director, said: “We’ve had great success within the haulage sector. Data automation is often a key priority for larger haulage firms, as is the need to coordinate and execute interdepartmental tasks on a global scal“We often find companies working in this space will invest in bespoke IT systems due to the complexities of their business. The research and development related to this then makes them eligible for tax credits, but that’s not widely known. Lots of companies are missing out.”
Dave Dunhill, chief technology officer at Pall-Ex Group said: “My advice to anybody thinking about looking into an R&D claim would be to have a conversation with RDS, as they’ll very quickly be able to identify if you are eligible.
“I questioned the scheme at first, but the amount we invested into the new software system was considerable, and on closer inspection, RDS was able to give us an estimate of how much we could claim tax relief on. And because we have continually invested in the project, we have taken part in the scheme over a number of years consecutively, culminating in a claim of nearly £300,000.”
Mark Joyner added: “If I were to say to you, I’ll give you £53,000 for your business tomorrow, I’m sure there would be lots of things that, as a business owner, you could do with that money. That figure represents the average amount of a successful claim through the HMRC R&D Tax Incentive. It is not a scam or a way to play the system, yet for many reasons, companies that are eligible are not claiming the money to which they are entitled.
“A lot of people think it sounds too good to be true, some are time poor and don’t have the time to investigate the scheme properly and some are just unaware that it even exists. At RDS we simplify the process and take a lot of the leg work away from busy accountants, senior teams or business owners.”
Haulage industry IT schemes that would qualify under the HMRC scheme include:
• The engineering of unique scripts to aid in data automation and data migration from legacy systems to a superior/new system
• The design and subsequent engineering of a unique platform capable of streamlining global processes
• The continuous testing, trialling and modifications of systems architecture in efforts to achieve superior functional capability within the overall deliverable
• The engineering of machine-based intelligence to aid in resolving invoicing inefficiencies, accurate data segmentation and interdepartmental report generation
• The integration of global internal systems into the customs database to ensure all departments adopted a proactive stance to the import/export changes presented by Brexit
