The UK Government created the UK R&D Tax Credit scheme in 2000. The government at the time recognised the UK was lagging in various innovation rankings and wished to provide an incentive or set of incentives that would stimulate innovation, creativity, and experimentation.
R&D tax credits are designed as a tax relief to encourage greater R&D spending and innovation at organisations. It now seems that this scheme is being sold by a clever cottage industry, wielding it as sure money back from a UK government program as reimbursement of Tech start-ups’s coders’ salary expenses.
Future Shaping Investigations
Next generation organisations deserve next generation guidance. This is the founding principle that brought The Future Shapers together. Over the last four years we have looked to published thought leadership content that is interesting, relevant and insightful with the aim of helping businesses and other organisations to shape and create innovative futures. The Future Shapers are building on this to now focus on the crunchier less attractive side of the innovation debate. The Future Shapers believe investigations into areas and topics in the innovation world where things may well not be as they should, will benefit from being brought into the light – and this will be a positive addition to our community.
Our TFS investigations efforts will be very closely linked to our editorial themes and topics may include the underbelly of the glamour of innovation, failing business models and practices, the snake oil salespersons with their magic frameworks and information about who provides top innovation support.
The intent behind this is to give our growing audience a fuller colour spectrum on the challenges and what it takes to bring innovations to life. This investigative piece will put under the spotlight the misuse of the UK’s R&D Tax Credit scheme
What is going on?
As a tech start-up that is going through the classic growing pains any opportunity for financial assistance is like catnip. You have to follow it. This was the start of a journey that unearthed a cottage industry generating almost £1bn a year, with almost pretty much no liability to its clients which could well be costing the UK taxpayer multi billions in wrongly paid out funds.
What questions are being asked?
Across a series of stories the investigation looks at how the UK R&D Tax Credit scheme is being used and applied for and identifies holes that indicate an industry making money off entrepreneurs for taking no responsibility, often at the expense of the government and the entrepreneurs themselves. What you can expect:
- An insight into the staggering numbers and viability of a successful claim.
- Explains how the tax credit benefits are being sold as almost guaranteed money back from government
- What to watch out for when weighing up the options
Before publishing this piece The Future Shapers did circulate it to with HMRC representatives and a number of specialist R&D agencies service providers. Up to the date of publication, no comments were received. Another attempt would be made to get responses from all interested parties this week, which we will publish on 18 June 2021.
Keep an eye out for the first story being published tomorrow.