TaxCorporate TaxBE Studios adviser claimed R&D relief

BE Studios adviser claimed R&D relief

Adviser to BE Studios claimed identical type of 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.

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