Biotech firm director shares how he leveraged Novel’s educational content to help his team write their first R&D tax relief claim in-house and save money
With R&D tax relief, companies can save up to 33% on their taxes but what does it take? The biggest reason why businesses do not try to file R&D tax relief claims themselves and, instead, hire a specialist agent is because of their lack of knowledge, experience and perceived difficulty. Novel aims to tackle this barrier.
When Lee Sacker, the director of Evergreen Technologies, needed to collaborate with his team to prepare their first R&D tax relief claim, he turned to Novel. Read the case study below where he shares his experience using Novel, some challenges he faced and advice on how to successfully navigate this process.
The challenge – Help Evergreen write a compliant research and development tax relief claim without prior experience and provide a place where multiple users can collaborate.
The outcome – A centralised place for collaboration and record keeping for their R&D projects going forward and a successfully submitted R&D tax relief claim.
The impact – The outcome will help support Evergreen’s operations for on going R&D work and ensure that the process is recorded with maximum efficiency for strong future tax relief claims.
As Lee dials in from Europe with a tan that leaves us pale Londoners a little jealous, we begin tackling the big issue of what it takes to write a technical narrative for a research and development tax relief claim in the field of biotechnology. “I am someone who looks for automation. For things to be as slick and quick as possible and during my search, Novel came up,” says Lee, while Sanela (who is responsible for our marketing) flashes a cheeky smile from across the screen.
The scientific nature of Evergreen’s project meant that they had to work alongside their subcontractor when writing the claim, and, fortunately, “the collaboration aspect of Novel was really, really good”. However, Lee ran into some unexpected problems when trying to get the team to use Novel.
As someone who has heard of and completed R&D tax relief claims before, Lee was quick to understand and was on board to use Novel, but not all of his colleagues shared his enthusiasm for this type of automation. As an entrepreneur and technology business investor with a long history in software development, Lee’s perspective and experience allowed him to successfully introduce this process to some reluctant parties. “I’m massively into these sorts of tools so it’s easy for me, but someone else is just so cautious,” describes Lee. So he found himself explaining that, “this is here to help you, and to make the process easier, and cheaper for the company, it’s not here to pin you against the wall”.
“the collaboration aspect of Novel was really, really good.”
Doing an R&D claim yourself for the first time can be worrying because the tax system is complicated and full of nuances. However, the goal of Novel is to prove that despite the difficult nature of R&D tax reliefs, it can be codified, and, therefore, you can do it yourself. “I totally agree with you,” says Lee, “sometimes people think that they better use company X because they are specialists and they are charging all this money so they must be good but in reality when done with proper education, R&D claims can are pretty straightforward.”
Intriguingly, when building Novel, we recognised that giving users the confidence that they can write their R&D tax relief claim would be a challenge. Lee echoed our thoughts when he started discussing how “some people were worried about writing something wrong”. “I had to make it quite clear to them that this is a collaborative tool, which allows us to get the reports right.”
“this is here to help you, and to make the process easer, and cheaper for the company….”
Speaking of reports, we took this opportunity to ask Lee about his opinion on the fact that we don’t charge our users to download their report, and, instead, give them the flexibility to amend them as many times as necessary. “I think this is valuable and also that Novel doesn’t send it straight to HMRC”, Lee adds. “I could explain to the team that it’s not like you press a button and it goes directly to them. No, you get a report, if you don’t like the look of it, then you press again and get another report until everyone is happy. Only then does it get submitted with the accountants”.
Lee continues that another point of contention was his team asking, “why are we doing this and that we don’t need to write any reports”, in the first place. Although businesses can claim R&D tax relief without any supporting documentation by simply writing down the R&D expenditure number on the CT Return, but “for me”, starts Lee, “I believe in good preparation and forward thinking, therefore even if you don’t need to submit your reports there and then, it’s far more beneficial and easier to create them as you go while it is fresh in your mind rather than waiting a few years down the line for an enquiry. So you are always a step ahead”.
To add to the point above, there appears to be a misconception amongst claimants who think that once the claim is paid out, it’s finalised. Whereas, many don’t realise that HMRC can go back and open an enquiry on your R&D tax relief claim, and therefore you want to have evidence of all the work along the way. “Exactly. The Evergreen projects are only a year old and already it’s difficult to recall some things we did, imagine trying to do this five years later. And what was good is even when we paused for that brief moment, we were always able to go back to Novel, and it’s all there so you can continue where you left off. That works brilliantly.”
“…we were always able to go back to Novel, and it’s all there so you can continue where you left off. That works brilliantly.”
And on that positive note, we got ready to say our goodbyes but before we left, we asked Lee’s advice on what we can do better, his response was “like a lot of these things it has a lot to do with education. You have to educate people to understand the what and the why”. We couldn’t agree more with Lee, and have begun working on some exciting plans for Novel in terms of education, so stay tuned, sign up to the platform or to our newsletter and learn more.