A five-fold increase in the number of compliance reviews carried out by HMRC has left North-east accountancy firms rethinking their approach to R&D tax claim services.

ZLX Business Solutions has responded to the tightening of regulations around R&D tax credits by launching its ‘gold partner’ initiative to help Aberdeen-based firms understand these changes and, crucially, ensure compliance.

The company, which has an office in the Granite City, is offering specialist support to accountants and other boutique R&D providers by providing a team of legal, financial and technical experts – without the need for expensive overheads.

This centralised resource is responsible for processing all claims and defending against any potential compliance reviews. Meanwhile, each gold partner has a dedicated account manager as well as an app and dashboard which tracks their client’s claim throughout the process.

Stephen McCallion, Founder and CEO of ZLX Business Solutions, explained: “Historically, only a small percentage of claims for R&D tax credits have been assessed by HMRC. We are now operating in a completely different landscape given the increased focus on compliance reviews, with some businesses commenting that up to 30% of their R&D claims are now being audited by HMRC.

“Most small firms simply don’t have the time or resources required to invest in a team of legal, financial and technical experts, create robust technical reports and simultaneously defend multiple compliance reviews.

“We believe the only way to thrive in this marketplace is to partner with other R&D specialist suppliers. Fortunately, our infrastructure allows ZLX to offer other accountants and R&D boutiques the benefits of working with a team of compliance officers, while freeing them up to focus on core operations.

“Initial feedback also suggests that our gold partners are winning more work and making more profit – without the need to employ more staff – due to the additional time they have available.”

Stephen McCallion, Founder and CEO of ZLX Business Solutions.

Stephen McCallion, Founder and CEO of ZLX Business Solutions.

In addition to becoming a gold partner with ZLX, the company provides various services including a complimentary pre-submission audit which involves a thorough review of the R&D claim before submission to HMRC.

This includes a detailed analysis of each project, ensuring that the technical narrative is aligned with HMRC guidelines, and that all financial information related to the claim meets the necessary criteria for eligibility. If a gold partner’s R&D claim is rejected by HMRC, ZLX will also provide accountancy firms with a robust claim defence service.

One recent example has seen ZLX support award-winning tax specialist RIFT by providing comprehensive support in compliance and legal matters, particularly around the complex landscape of R&D tax credits, which are subject to frequent changes.

This partnership represents a strategic alignment to support businesses in efficiently managing their R&D tax credit compliance requirements, ensuring adherence to regulations and maximising benefits without the added strain on resources.

Stephen McCallion added: “We look forward to working together with RIFT where our combined strengths can be fully utilised to the benefits of our respective clients. This new initiative allows our gold partners to take full advantage of the large infrastructure possessed by ZLX, enabling peace of mind in the most challenging of circumstances within the R&D tax relief market sector.”

Alison Soltani-Davies, Chief Financial Officer at RIFT, commented: “We have recently entered a strategic partnership with ZLX and the whole process from start to finish has been seamless and enjoyable. The speed and ease of engagement as well as the professionalism demonstrated by the ZLX team is to be applauded. We very much look forward to working together going forward and being able to offer our clients the benefit of their technical and legal expertise.”

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