As a complex area of the tax code, R&D tax claims usually require business owners to hand the process over to you as their accountant – so you need to apply best practices to every step of the process.
Not only does this reward the trust that clients put in you, but it also helps to build your reputation as a go-to practice in this area at a time when many firms aren’t offering an R&D tax advisory service.
With support from the experts, you can help your clients benefit from the innovative work they’re carrying out and grow your own practice!
Documentation and evidence
Integrity is the core of all successful R&D tax claims, now more so than ever. It is therefore vital that you and your clients prepare sufficient evidence and documentation to demonstrate the validity of a claim.
If a claim is investigated, whether due to a random selection or targeted enquiry, HMRC will look at a few key areas where evidence is particularly crucial:
- The definition of R&D – You’ll need to provide reasonable proof that your client’s claim covers a project which qualifies as R&D, such as being in the field of science and technology
- Eligible costs – Some costs, such as capital expenditure, don’t always qualify for R&D tax relief, so you should document how all costs within the claim are eligible
- Investment and expenditure – You’ll also need evidence of qualifying costs themselves, to demonstrate how much the client has spent.
This will also protect your practice itself from undue scrutiny.
Guidance according to the law
To many firms, acting according to the legislation around R&D tax relief is self-explanatory.
However, one of the reasons behind the seismic shifts the scheme has recently undergone was that this wasn’t always the case, with some practices preparing and submitting claims for ineligible work.
While the majority of the sector now works with integrity, it is worth remembering the context for HMRC’s enquiry programme and what it is trying to prevent by overhauling the scheme.
Advice is your secret weapon
One of the issues that we know accountancy firms face with regard to R&D tax claims is a reluctance to seek advice from specialists in the field.
R&D tax relief is an excellent incentive for innovation and well worth your time and that of your clients, but we acknowledge that it is complex and that some firms are concerned about the enquiries being run by HMRC.
External support, or outsourcing your R&D tax relief service, may well be the answer.
Best practice, at its core, means achieving the best outcome for your clients in accordance with tax law and the work that your clients conduct.
If this is best achieved by seeking out advice and support from a specialist R&D tax firm, then we recommend you do so.
We’re always happy to help accountancy firms when advising clients on claims, evidence and enquiries – putting integrity and the needs of our clients and theirs at the core of our service.
Need advice today? Contact a member of our team at [email protected].
