Case Study | Software Enquiry Defence

Challenge

The client approached Wilby Jones as they were stuck in an HMRC enquiry with another adviser who didn’t offer enquiry support.

HMRC failed to see any innovation within their software and AI developments.
The methodology for the costs was not transparent or detailed enough for HMRC
HMRC wanted more information on the timelines and competent professionals involved in the claim.

Solution

Wilby Jones examined the existing claim, provided HMRC with a more detailed technical narrative, and aligned all costs with guidance and legislation.

We outlined both the R&D specific projects, as well as their respective commercial projects that the R&D was derived from, providing a full case study and detailed timeline.
Removed expenditure from the claim that did not qualify, such as consumable costs that had not been transformed or destroyed.
Provided detailed job roles and responsibilities for each employee within the claim, detailing how they contributed to the resolution of technological uncertainties on the R&D projects.

Impact

Wilby Jones successfully resolved the enquiry within eight months, taking on most of the workload and minimising the time the client needed to contribute.

All technical details were gathered across just two meetings, allowing the competent professionals to focus on the work that really matters, while Wilby Jones resolves the enquiry.
The case demonstrated how a proactive approach to HMRC’s questions and transparency with costs leads to a swift resolution.
The client’s cash flow was protected, and only a small number of disallowable costs needed to be paid back to HMRC, which was only a small portion of the overall claim. Only a small portion of the overall claim needed to be paid back.

Who was the client?

Our client is a software specialist that focuses on employer branding, recruitment marketing and technology. They work with medium to large organisations who are looking to attract and retain top talent. Using AI and software, they help organisations attract better candidates by strengthening their employer brand, enhancing their reputation as a place to work, and creating high-performing careers websites. They also support recruitment through targeted vacancy advertising and provide recruitment software that enables businesses to manage applicants efficiently throughout the hiring process.

What challenges did our client face?

HMRC could not understand the complex work undertaken on the R&D projects associated with developments in AI and software in the form of a new App. HMRC could not distinguish the genuinely novel work undertaken by the client from the standard day-to-day practice of a competent software engineer.

Furthermore, their previous adviser had not included a detailed cost methodology in their report, meaning HMRC had little idea how the claim was quantified and how this aligned with the guidance and legislation.

What was the result?

Wilby Jones successfully resolved the enquiry within eight months, taking on most of the workload which allowed the company to continue their groundbreaking work within their field, without having to waste time liaising with HMRC.

The client’s enquiry was successfully resolved after correspondence from Wilby Jones explaining the R&D projects, the credibility of the competent professionals, and a cost methodology that removed disallowable costs. The case highlighted how transparency is crucial with HMRC; if more information is given up-front in your R&D report, the fewer questions HMRC are likely to have.

Following the successful closure of the compliance check, the client has continued to work with Wilby Jones for their R&D claims for subsequent years.

Who was the client?

What challenges did our client face?

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