Small and medium businesses are spending an estimated £880 million a year hiring expensive specialists to claim R&D tax credits, according to new app Novel that automates and checks claims.
SMEs made 76,225 R&D tax credit claims in 2019-20, with the average claim being £57,723, the latest HMRC figures revealed at the end of September. Tax credit specialists commonly charge 20% of a claim’s value, meaning that the average SME claim incurs a £11,544 bill.
Novel app – created by Optimal Compliance – tracks a company’s research and development work and automates its R&D tax credit claims. It integrates with a firm’s accounting system and Companies House data to quickly add details to claims.
The low monthly subscription of £50 – which is free for the first three months – means that thousands of small businesses can claim their R&D tax credits for a much lower cost.
Subscribing to Novel for a year costs only £450, saving a business almost £11,000 if they make one claim a year. Across every SME claim, this adds up to a £834 million a year saving for small businesses.
Phil Redford, partner at Novel, said, “The amount that smaller businesses are spending on expensive tax credit specialists every year is shocking.
“Firms could save themselves £846 million every year by using alternative solutions, and invest that money back into more R&D.
“More money for R&D doesn’t just benefit individual businesses, it lifts Britain’s wider economy, and results in more innovation and invention.
“Making a claim for R&D tax credits doesn’t have to be expensive or complicated, and our new app walks you through the whole process.
“The cost of hiring an expensive R&D tax specialist has put many small businesses off even trying to get the money that’s rightly theirs, and we’re on a mission to put that right.”