RETAIL TAX

RETAIL R&D TAX INCENTIVES

As a retail business, you’re no stranger to disruptive events. From the emergence of online shopping in the early noughties, to the 2008 financial crisis and the modern-day maelstrom that is COVID. The sector has been through the wringer. And then some.

But, disruptive events bring change. Change often means R&D. And a maximised, robust R&D tax incentives claim is one of the most effective ways to keep your business moving forward.

WHAT HAVE WE BEEN SEEING IN THE SECTOR?

COVID has been a driving force behind new activities that the Cooper Parry R&D Incentives team are helping their retail clients claim for, especially in relation to the surge in online shopping.

As retailers have adapted, we’ve seen R&D as they’ve developed new capabilities for their IT platforms. That includes changes to deal with selling increased product ranges online, making payment processing more efficient, moving internal software systems onto the cloud, or enhancing stock management systems.

Changes because of COVID have also driven R&D in wider supporting industries, including order fulfilment specialists, logistics firms and packaging manufacturers.

WELL-VERSED WHERE IT COUNTS

Big changes required by retailers are often software driven. This can be a complex area of the R&D regime and HMRC has a specialist team from their Chief Digital and Information Office (CDIO) who work closely with the R&D Tax inspectors to make sure R&D claims that include software activities are fully compliant with the regime.

Our Head of IT for R&D Incentives, Graeme Brown, is a specialist in the industry and has considerable experience with software claims having been in consultation with CDIO on several occasions.

So, whether your claim relates to software changes, or other areas like product development, after working on the R&D scheme since it began in 2000, we’ve got the retail expertise and track record to make sure your R&D tax claim is robust and maximised; identifying qualifying R&D that other advisers so often miss.

Because after all, with a generous benefit of up to 33p per £1 of cash invested to make the changes, it’s only right the scheme fuels your business and your innovation through this tricky period, as intended.

CAPITAL ALLOWANCES

What if we said it could cost you nothing to open your next store?

With the tax saved from a maximised, accelerated capital allowances claim, it’s a very real possibility – and something our specialist Capital Allowances team has achieved for a long list of retailers. Here’s how:

HISTORIC REVIEWS

So many businesses think their historic claims were maximised. But by re-examining expenditure already incurred in previous years, we’ve delivered additional claims, increased tax savings, and achieved tax repayments time and time again, with one client receiving more than £1m in repayments – sufficient to add another site to their portfolio and boost sales.

TEMPLATES & GUIDANCE NOTES

Some of our clients get their property professionals to complete capital allowances templates based on guidance. This can be a very cost-effective move, provided the templates and guidance notes are accurate and stay up to date with building designs, construction techniques and case law.

Often, they aren’t. Often, they don’t. And one detailed review found a whopping £8m of unclaimed relief. From there, we helped the client to update the template and link it to cost information, automating significant proportions of work, driving down risk and increasing capital allowances claims.

TAX EFFICIENCY DESIGNS

Another way we can help to improve claims is by reviewing the tax efficiency of your store design across areas like internal partitioning, ironmongery, floor finishes and rainwater installations.

FIXED PERCENTAGE CLAIMS THROUGH STATISTICAL SAMPLING AGREEMENTS

You can also reduce the time and cost of annual capital allowances reviews by agreeing a fixed percentage with HMRC, which can be used for several years, subject to periodic sampling. While this approach helps for consistent store roll out programmes, slight variations in legislation, design or technology can lead to you underclaiming relief, so the agreement does need to be reviewed regularly to keep achieving the best outcomes.

FURLOUGH SUPPORT

The Coronavirus Job Retention Scheme. For businesses across all sectors, there’s been no hotter topic since March 2020.

We’ve been keeping our clients up to speed with the changes and helping them to prepare, review and submit furlough claims.