Corporation Tax: Research and Development tax relief with Leyton - has anyone used them?

[antropy]

I've been speaking with a company called Leyton who specialise in providing tax relief if some or all of your business activities count as qualifying R&D:
https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

A link to their service is here:
http://www.leyton.com/web/uk/r-d-tax-relief-credits

My accountant thinks it's probably a good idea, and initial discussions with them seem to suggest a fair amount of our work would qualify.

So I'm just hoping to hear if anyone has experiences good or bad with Leyton or indeed similar companies?

 

[UK Contractor Accountant]

Why can't your Accountant deal with the R&D tax relief claim?

 

[antropy]

Why can't your Accountant deal with the R&D tax relief claim?

Good question. I haven't asked him but I suspect he would say it's not his area. I expect Leyton would say that they are so experienced that even minus their fee I would still end up with a better deal from them. I'm inclined to agree with that philosophy of employing someone who specialises in a niche area for the best result. My accountant would definitely need to charge a lot extra if he were to do it.

 

[SteveHa]

Then you need a new accountant. Any accountant worth his salt can prepare an R&D claim, and will usually be cheaper than these "specialist" claim companies. And I've seen some claims by specialist companies that look to me like back of a fag packet comps and a fair few chances.

Most accountants will obtain advance assurance first, which will give you a degree of certainty over the claim, rather than the risk of an enquiry down the road.

 

[antropy]

Then you need a new accountant.

It could be an option but we are happy with everything else.

usually be cheaper than these "specialist" claim companies.

I suspect they'd say they would be able to claim so much more that you end up better off overall by using their service.

Most accountants will obtain advance assurance first, which will give you a degree of certainty over the claim, rather than the risk of an enquiry down the road.

Yep, Leyton will counter any claim by HMRC.

 

[UK Contractor Accountant]

How much are they charging?

% of refund?

 

[antropy]

How much are they charging?

% of refund?

Good question. I don't know if they vary their rate based on the total amount they think they can reclaim, but in our case they expect to be able to reclaim over £10k per year and charge 27.5% of the refund. They seem pretty professional and seem to know their stuff.

 

[SteveHa]

Yep, Leyton will counter any claim by HMRC.

Yep, maybe so, and success would depend on the degree of expertise and chance taking. Advance Assurance will generally mean that the claim won't be challenged for the first three years in the first place.

but in our case they expect to be able to reclaim over £10k per year and charge 27.5% of the refund.

That's a high percentage charge. I would expect 15% - 20%.

 

[UK Contractor Accountant]

From a competitors site:

"The best approach, in my opinion, is simply to either ignore tax credits or file them yourself until the company reaches a few tens of thousands of pounds of annual R&D spend, then go with a specialist on contingency fee (ideally priced about 20%) for the next few years (usually a 5-year contract), then, once the contract runs out, if you’re large enough by that point that your yearly fees exceed £10k, switch to that model."

 

[antropy]

(ideally priced about 20%) for the next few years (usually a 5-year contract)

20% sounds good but I definitely don't want to do a 5 year contract.

 

[UK Contractor Accountant]

How many staff, (internal+external) do you have engaged in R&D projects?

 

[antropy]

From what they said, almost all of our staff count as qualifying for R&D:

3 internal fully qualify
3 external fully qualify
1 external part qualifies

 

[SteveHa]

So you have three members of staff internal who spend 100% of their time on qualifying R&D activities? If any of that time involves travelling, or if they are paid for breaks etc. then you don't. The definition of qualifying activities is quite tightly drawn.

 

[antropy]

So you have three members of staff internal who spend 100% of their time on qualifying R&D activities? If any of that time involves travelling, or if they are paid for breaks etc. then you don't. The definition of qualifying activities is quite tightly drawn.

From what I've been told it's near enough 100%, yes. We rarely travel or do anything other than code.

 

[UK Contractor Accountant]

https://granttree.co.uk/tax-credits/#taxcreditspricing

They charge 20%

 

[billmccallum1957]

https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

If you claim the relief through your annual CT return, this would be a job for your accountant.

 

[SteveHa]

If I'm honest, it's a PITA not doing the Return and accounts, too. I recently had to do an R&D claim for a future client, who's old accountant was doing the accounts and CT600. Coordinating efforts to get the R&D claim correctly entered by a firm unfamiliar with the process was a damned nuisance.

 

[Alessia]

Hi @antropy !
I was wondering if you ended up going with Leyton and what your experience was.
Thanks!

 

[antropy]

Good question! We did indeed, and all went well, and we got a nice rebate from HMRC.