Blog: Six reasons to review your R&D tax credit advisor
For many forward-thinking businesses, claiming R&D tax credits has become part of their long-term funding strategy. Many who claim do so through an advisor, whether that be their accountant or a specialist provider.
On the surface all advisors can appear to deliver a similar service, however, how your claim is handled, the process itself and the experience of the team can wildly differ.
We share 6 reasons why you should review your advisor to ensure they’re still the most effective and suitable for your business.
If you’ve come across this article and are new to claiming, check out our guide: How to find the right R&D Tax Credit advisor
Are you getting the best advice?
Whilst the rules around what does and doesn’t qualify for the scheme are intentionally broad, this does not mean your business should be claiming for anything and everything. Unfortunately, in recent years many advisors have entered the market who promise big claims for low fees, and often underdeliver. Time after time we are approached by companies to defend HMRC enquiries for inaccurate claims submitted by these advisors.
If any of your claims have sounded too good to be true, then they probably are, and HMRC has the power to launch an enquiry for up to 6 years after submission. In fact, HMRC is now hiring more staff to review claims than ever before. And unsurprisingly the increase in checks appear to be for companies that have filed larger claims and those that have filed without the help of a specialist.
With these increased resources and new compliance measures in place, it’s more important than ever to ensure that your claim is robust and capable of withstanding any scrutiny.
You’re best placed with an advisor who can give honest and best practice advice from the outset – even if that means not claiming for all activities.
Could you be saving time?
Some advisors add unnecessary steps to the claims process (deliberately, or through inexperience) or lack solid methodology. If you’re paying an advisor to compile your claim, then you expect them to do the heavy lifting. With some advisor’s, certain parts of a claim, such as compiling a technical report, are left to the client, and the advisor only checks this before submission. An effective process should be simple, easy and designed around your needs. If you’re required to spend weeks and not hours working on your claim, then you should review your options.
Could you be getting more from your claims?
If your advisor doesn’t understand or keep up with both your industry developments and how they apply to the R&D Tax Credit scheme, then they could be undervaluing your claim. For example, what qualified as a technological uncertainty last year is unlikely to be an uncertainty this year.
In recent years many advisors have entered the industry who lack the expertise and experience in the scheme or sectors they work with.
Our experts frequently come across additional expenses that can be claimed for within HMRC’s rules that might be missed by less knowledgeable advisors, boosting the value of a claim.
Typical areas we see underclaimed include:
- Time spent on R&D
- Agency personnel
If your current claims have overlooked any of the above, then you might be missing out on thousands of pounds that you’re entitled to.
Are you paying an appropriate fee?
Most advisors will calculate a fee based on either qualifying expenditure, Corporation Tax saved or offer a fixed fee. Depending on your current fee structure, you may be paying thousands of pounds more than you need to be, as demonstrated below.
Are you being stung by additional costs?
You should review the services included in your contract, as advisors are not always transparent with their fees and there may be hidden costs.
For example, will your current advisor defend an HMRC compliance check as standard? Or is this an additional service that isn’t included in the initial fee?
Administration and submission charges are also additional costs we frequently see hidden amongst contractual jargon.
Can your current advisor offer any supplementary services?
Is your advisor’s only specialism R&D tax credits? As an innovative business R&D tax credits are rarely the only form of funding that you will be eligible for or could benefit from.
An advisor specialising in innovation funding more broadly will understand the full landscape of how your R&D tax credit claim, and other innovation funding options (such as grants) can be combined and optimised.
Food for thought?
We also offer a no-cost benchmarking service where you can understand both risks and opportunities with any claims you’ve made for the past 2 years.
Book an appointment with one of our experts today.