BE Studios adviser claimed R&D relief

The adviser to BE Studios, the software company criticised by a High Court judge for submitting poor claims for R&D tax credits, was claiming the same type of tax relief itself.

According to accounts up to 2003, advisers LF Consulting claimed credits amounting to £77,392 ‘recoverable in respect of research and development expenditure’, a description that experts have said could refer only to R&D tax credits.

The accounts state that the company was engaged in the R&D of ‘business management software’.

DTI guidelines say that qualifying software ‘must seek to achieve a scientific and/or technological advance and form the whole or part of a project to resolve scientific and/or technological uncertainty on a systematic basis’.

BE sued its former tax advisers, Smith & Williamson, for failing to advise it of the existence of R&D tax credits. The judge concluded that BE should not have received the credits in any case.

Alan Price, a director at LF Consulting and a member of the ICAEW, was forced to acknowledge as part of the proceedings that he could not assess BE Studios’ scientific or technical breakthroughs as he ‘lacked the technical background or knowledge’.

No suggestion has been made to date that LF’s accounts breach the relevant guidelines. Price could not be contacted for comment, and the branch of LF Consulting in the Czech Republic refused to answer questions on his behalf.