Hybrid teams face unique challenges when record-keeping for R&D tax relief

Good record-keeping is the key to making successful R&D tax relief claims, as this can enable an R&D tax consultant to create a watertight report.

However, many businesses seem to struggle to know what needs to be documented and when the R&D work is split between different locations, the problems with record keeping increase.

Accountants can guide their clients through the process of tracking the innovative work, and we are here to highlight the things you should be paying the most attention to.

What needs to be recorded to make an R&D tax relief claim?

While there are no strict guidelines on what, other than financial data, should specifically be recorded when initially filing an R&D tax relief claim, there are some key considerations to make.

Encourage your clients to take a step away from the process.

If they were trying to figure out what innovation was happening, why it was happening, and what work was done to make it happen, what information would they need to deduce this?

It can be difficult for your clients’ competent professional to appreciate the work they do.

They may be so used to discovering problems and trying to figure out solutions that they forget to document the process.

However, it is their records that are a vital part of the R&D tax relief claim.

Technical uncertainty is the core of R&D tax relief claims, so documenting when and how this arises is essential.

This becomes even more important when teams are not working in the same location as each other.

Why do hybrid teams struggle to maintain R&D records?

Despite advances in technology allowing teams to more effectively liaise with each other remotely, teams that operate in different locations may still struggle to coordinate different records.

We also understand that it is possible to get swept up in the excitement of R&D work and focus on the end result rather than the steps taken to get there.

Cataloguing every failure in detail may not be at the top of the priority list, especially if these setbacks are frustrating.

Keep in mind that it is the ability to demonstrate that the R&D was complex that is of most benefit when submitting an R&D tax relief claim.

As such, it is important for teams, wherever they work, to keep detailed records of the R&D undertaken.

How can I help my client improve their record-keeping?

As R&D tax consultants, we can help you put together a template to make information gathering a simple process.

Removing complexity and ambiguity from the process for your clients is the best way to ensure that they are able to improve record keeping practices in the future.

This is especially important for hybrid teams where important information might slip through the cracks if there are any lapses in communication between the different team members.

As a leading R&D tax consultant, we want to work with you to better equip innovative businesses to submit fully compliant, maximised R&D tax relief claims.

Don’t let poor record-keeping lose your clients’ funding. Speak to our team today.

Tom Mason