Navigating R&D tax relief claims in the defence industry: Security protocols and confidentiality

Can a company in the defence sector claim R&D tax credits?

Companies operating within the defence space are only too aware of the specific security processes and protocols that are necessary when supporting national security. However, this can often lead to these companies questioning if they are able to submit a full R&D claim to HMRC, without contravening these rules or without exposing secret data. This is a valid concern but shouldn't be a barrier to claiming back the legitimate R&D costs associated with the innovation.

At RCK, we have a specific defence focus, guided by advisors with extensive industry experience. Our defence team, additionally includes consultants who prepare claims for defence companies, supported by a compliance team with former experience working within HMRC. This enables us to understand and navigate the security aspect of these claims and support the UK defence companies who are operating within this environment, taking into consideration the defence and national security implications. Some members of our defence team hold enhanced clearances which allow them to work at secure client sites on the most sensitive of projects.

Our specific defence focus enables us not only to stay up to date with changes within the sector, in order to support our clients, but also to support both the MOD and HMRC in developing methodologies to more effectively deal with classified R&D claims. This is an evolving piece, which is continually under discussion and review. Through doing this, we can continue to provide experienced, and security cleared individuals who are at the cutting edge of R&D tax policy and who have the full confidence of all sides when supporting our clients in the R&D tax relief claim preparation and submission process. This level of investment in our defence focus, ensures that we submit claims on behalf of our clients which contain the right level of detail required by HMRC yet are not compromising sensitive or classified project details.

RCK's process of submitting an R&D claim within the defence sector:  

1. A sensitive or classified project is brought to RCK for the purposes of R&D tax relief  

2. RCK work with the client to understand the level of classification at which they operate to ensure that we can support clients at that level  

3. Internally, we then ensure that we are following any security protocols required to support the client with their claim, usually by agreeing a Security Aspects Letter and deploying appropriately cleared personnel.  

At RCK, we do not retain classified data on our systems, but instead we work with clients at their locations and on their systems, to access the information that we need in order to prepare a claim with appropriate detail at the right security classification. This ensures that our client’s raw data remains secure, but that the R&D claim meets HMRC requirements for detail.  

Internal defence expertise:  

To ensure a comprehensive understanding of the defence sector, RCK has created a bespoke defence team and has strategically invested in experienced defence advisors. Our board includes Lord Philip Hammond, former UK Defence Secretary and Chancellor, and we are advised on operational aspects by Andrew Carwardine, a former senior British Army officer with over 40 years of experience at the highest levels of UK defence and security.
Andrew also acts as RCK’s Senior Defence Partner and leads our defence function alongside co-founder Peter Clark; both are available to provide advice to clients as part of the RCK defence initiative.

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Learn more about claiming R&D tax credits as a business in the defence sector here.

Should you have any specific questions in relation to claiming R&D in the defence sector, please don’t hesitate to get in touch.

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