In our latest Spotlight interview, we spoke with Founder and Managing Director of Claim Capital, Max Raynor. Claim Capital provides an end-to-end R&D Tax Credit Service for innovative UK businesses, enabling them to reclaim up to 33% of their yearly R&D expenditure from HMRC.

Claim Capital’s Fixed Fee model challenges traditional percentage-based R&D Tax Advisors and provides a more cost-effective route to securing successful and maximised R&D Tax Credit claims. With over 20 years of technical experience in research and development tax, Claim Capital has reclaimed over £25.8 million in tax benefit for their clients. Max explains the story behind Claim Capital, his experience with the R&D Tax Relief scheme, and the red flags to look out for when filing R&D Tax Credits.

Q. Claim Capital was founded in 2018 with the aim of disrupting the traditional R&D Tax Advisor market. How and why did you get started?

A. Having started my career in Corporate Finance, helping startups and SMEs scale, I saw the many different avenues of funding available to businesses in the UK. When I later came to invest time and money into my own research and development, I was aware of the financial support offered by R&D Tax Relief. After claiming R&D Tax Credits myself, I couldn’t help but question why so many R&D Tax Advisors were charging companies 10-30% of their tax benefit to file their claims. With the R&D Tax Relief scheme being set up to fund innovation, this seemed counterintuitive. Percentage-based fees aside, my experience within an early-stage R&D project showed me how crucial these funding schemes can be for gaining traction and fuelling cash flow.

Our accountant took four months to complete and submit our R&D Tax Credit claim, and in this time, we could have accelerated our growth much further had we received our claim benefit in a timely manner. I was sure that many R&D projects like my own would scale more effectively if they were able to reinvest the return of the R&D Tax Relief initiative, faster. I founded Claim Capital in 2018 to disrupt this traditional model and enable UK businesses to reap the true benefits of R&D Tax Relief – without being faced with mounting percentage-based fees every financial year, and without having to wait months or even weeks to have their R&D claim filed.

Q. How does Claim Capital improve the process of claiming R&D Tax Credits for UK businesses?

A. The more time businesses spend conducting research and development, the more money they’re going to spend on qualifying R&D activities – which are the areas of spending HMRC allows you to claim back. I don’t think any business should be in a position where their Advisor is taking £50,000 out of their £500,000 R&D Tax Credit claim. Our fixed fee allows businesses to keep hold of more of their R&D tax benefit, as their claim size grows over time.

In addition, we provide an end-to-end R&D Tax Credit service. This means that businesses can offload the entirety of their R&D claim and focus on what matters most – advancing their innovation. All we ask from the client is a technical call providing an in-depth understanding of the R&D activities undertaken. Following this, our team completes both aspects of the R&D claim – the financial and technical reports – to the highest standard. Our team features two dedicated R&D tax departments that specialise in either the financial or technical side of the R&D claim. Our clients’ Financial R&D and Technical R&D Consultants work side-by-side to complete the R&D claim within just 3-5 working days of receiving sufficient information.

As an authorised HMRC agent, we then have the option to submit R&D Tax Credits in-house. Whilst accountants can do this themselves, there is a much greater risk of inaccuracies. R&D claim submission requires specialist amendment of the CT600 to account for R&D activity. Often, this is where mistakes crop up from generalist providers. Choosing an R&D Tax Specialist that can take care of this important detail will ensure compliant processing when the R&D claim is reviewed by HMRC.

Q. What differentiates Claim Capital from other R&D Tax Credit providers?

A. Over the past year or so, we’ve seen an influx of R&D Tax Credit platforms enter the market. These use software to provide a ‘help-to-complete’ service, taking input from the claimant and populating a general R&D claim template. We strongly believe that automation is no substitute for (human) specialists when it comes to fulfilling HMRC’s requirements of an R&D claim, especially within the current climate of increased compliance checks and formal enquiries.

This is particularly evident in the technical report aspect of R&D Tax Credits, which relies on a detailed description of relevant R&D activities instead of relying on financial data. Another aspect that sets Claim Capital apart from other R&D Tax Advisors is our HMRC enquiry support, at no extra cost. We’ve heard horror stories about claimants being abandoned by their Advisor when HMRC later scrutinised their R&D claim. This leaves business owners with no experience in R&D tax having to defend a claim that they themselves didn’t complete!

Filing your R&D Tax Credits with Claim Capital means that our work’s not done until you receive your R&D tax benefit from HMRC. So, if our R&D claim submission is selected for enquiry, we’ll gather the necessary evidence to reach a resolution on your behalf. We’re very confident in seeing the entire R&D claim process through, so we only charge our fixed fee once our clients receive their R&D Tax Relief from HMRC.

Q. In March of this year, HMRC paused R&D Tax Credit payments for several weeks due to a crackdown on fraudulent R&D claims. What’s the solution to this problem? And is there anything claimants can do to safeguard against illegitimate R&D Tax Advisors?

A. Rising competition within the R&D Tax Advisor space has led to a wider range of businesses being approached by R&D Tax Credit salespeople. To secure their business, companies are often told that they qualify for R&D Tax Relief without proper eligibility screening. I believe this has definitely contributed to the rise in dubious R&D claims being submitted to HMRC.

Another factor that could be enabling fraudulent activity within the market relates back to percentage-based fees. R&D Tax Advisors that charge a percentage of their clients’ R&D claims are commercially motivated to file the highest-value R&D Tax Credits possible so that they can take home a larger slice of the pie.

For this reason, some percentage-based advisors have been reported to overinflate R&D claims. Thirdly, the automation software used by R&D Tax Credit platforms populates R&D claims extremely quickly. This makes it very easy for non-eligible businesses to complete and submit R&D Tax Credit claims (without having to explain their R&D to experts) in the hopes that theirs will stick. Following the pandemic, I can understand a business’ motivation behind trying to access new tax incentives and replenish their cash flow.

However, it’s the responsibility of the R&D Tax Advisor to be fully transparent about the areas of qualifying R&D expenditure that must be met in order to make a claim. It’s a shame to see this problem come to light, as it negatively affects the totally reputable R&D Tax Specialists out there. But overall, increased efforts to stamp-out fraudulent activity from both R&D Tax Credit claimants and advisors are very much welcome.

As a long-standing UKPA partner, Max has helped countless PropTech businesses fast-track growth by securing them maximised R&D Tax Credit claims on an annual basis. 

Claim Capital is currently offering UKPA Gold Members a £500 discount on their first R&D claim.

To find out if your business can claim R&D Tax Relief, or to explore why Claim Capital are our recommended R&D Tax Credit provider, arrange a free R&D Tax Credit consultation with Max.