A five-fold increase in the number of compliance reviews carried out by HMRC has left hundreds of accountancy firms rethinking their approach to R&D tax claim services, according to one leading industry expert.
ZLX Business Solutions has responded to the tightening of regulations around R&D tax credits by launching its ‘gold partner’ initiative to help firms understand these changes and, crucially, ensure compliance.
The company, which has offices in Glasgow and Aberdeen, is offering specialist support to accountants and other boutique R&D providers by providing a team of legal, financial and technical experts – without the need for expensive overheads.
This centralised resource is responsible for processing all claims and defending against any potential compliance reviews. Meanwhile, each gold partner has a dedicated account manager as well as an app and dashboard which tracks their client’s claim throughout the process.
Stephen McCallion, founder and CEO of ZLX Business Solutions, explained: “Due to the increasingly complex compliance requirements and additional demands these are placing on businesses, we believe the only way to thrive in this marketplace is to partner with other R&D specialist suppliers.
“Historically, only a small percentage of claims for R&D tax credits have been assessed by HMRC. We are now operating in a completely different landscape given the increased focus on compliance reviews, with around 30% of all R&D claims now being scrutinised this year.
“Most small firms simply don’t have the time or resources required to invest in a team of legal, financial and technical experts, create robust technical reports and simultaneously defend multiple compliance reviews.
“Fortunately, our infrastructure allows ZLX to offer other accountants and R&D boutiques the benefits of working with a team of compliance officers, while freeing them up to focus on core operations.
“In effect, this new partnership offers professional firms peace of mind that their clients are in good hands. Initial feedback also suggests that our gold partners are winning more work and making more profit – without the need to employ more staff – due to the additional time they have available.”
ZLX has developed a reputation as a robust defender of its clients against HMRC compliance reviews thanks in part to the investment made in recruiting its own, in-house specialist legal department. It has also invested heavily in compliance and developing software which allows the company to process clients’ R&D claims seamlessly and within a maximum of four weeks.
The company is led by an experienced management team, including experts in legal, accountancy and technical disciplines, who identify projects eligible for tax relief and help navigate clients through the claims process.
In addition to becoming a gold partner with ZLX, the company provides various services including a complimentary pre-submission audit which involves a thorough review of the R&D claim before submission to HMRC. This includes a detailed analysis of each project, ensuring that the technical narrative is aligned with HMRC guidelines, and that all financial information related to the claim meets the necessary criteria for eligibility.
ZLX will also provide accountancy firms with a separate claim defence service in the event that an R&D claim is rejected by HMRC. The company will review the reasons for the rejection and work with the client to understand HMRC’s concerns and then address any issues before resubmitting the claim.
