As the Government has pledged to increase support for R&D in the UK, we can expect that some innovative businesses may seek support with their first-time R&D tax relief claims.
In order to accommodate the needs of clients in an area that might cause them some confusion, it is best to understand the steps needed to properly prepare new claims for the R&D tax relief claim process.
What should first-time claimers know about the R&D tax relief claim process?
It would be best to start by alerting a client to the existence of the Advanced Notification Form (ANF).
This is because without this form, the entire R&D tax relief claim will be invalid and every conversation beyond that would be fruitless.
The deadline for the ANF is six months after the year-end.
With the admin requirements handled, it would be wise to inform a prospective client about what constitutes R&D and what will be ineligible for a claim.
As a reminder, a valid R&D tax relief claim must highlight how the work was conducted:
- looks for an advance in the field
- had to overcome scientific or technological uncertainty
- tried to overcome scientific or technological uncertainty
- could not be easily worked out by a professional in the field
Failure to address any of these points will result in the claim being rejected, so it is ideal to weave these questions into initial conversations.
New clients should also be made aware of the enquiries process that can result in claims being delayed.
Even fully compliant R&D tax relief claims are not safe from the Mandatory Random Enquiry Programme (MREP), so clients know to prepare for potential delays in receiving their funds.
What advice can help clients with preparing R&D tax relief claims?
We are strong advocates for enhanced record-keeping practices in R&D work.
This is because the technical narrative benefits from as much detail as can be provided and it is often a challenge to fill in the gaps after the fact.
If the competent professional can be encouraged to document their thought processes and the trial-and-error methodologies applied in the R&D work, then the technical narrative can better reflect the challenging nature of the task.
Better time tracking can also result in more accurate figures, as it is essential that time spent working on R&D is allocated correctly, while time spent doing regular work or routine tasks is discarded.
A new client may also be unaware of the range of indirect activities that do qualify for R&D tax relief.
We recently wrote an article detailing many aspects that get overlooked in R&D tax relief claims, so it is worth refreshing your memory before approaching new clients.
Ultimately, the best way to help new clients approach R&D tax relief is to draw from expert sources and discuss the matter with confidence.
As R&D tax consultants, we work to improve the quality of R&D tax relief claims by ensuring our fully compliant claims are maximised for optimal relief.
We also want to help accountants and innovative businesses understand the power of R&D tax reliefs and actively encourage anyone conducting R&D work to have a conversation with us to find out their eligibility.
We will support you and your clients, both old and new, so that more innovation can be done in the UK.
