As you’ll probably have seen, some clients come to their accountant for support with R&D tax claims, certain that they want to submit and that their work is likely to qualify.
However, many will be unaware of their eligibility for the scheme and will require substantial support to get them ready to submit a claim.
Many of our accountancy partners find that this is a common route towards providing R&D tax advisory services, in the course of their regular tax and accounting work with clients.
Make them aware of the scheme
Long-standing business owners and those within R&D-heavy sectors may well be aware of the R&D tax scheme, but it’s not always obvious to an uninitiated client whether they are even conducting R&D, qualifying for the scheme or not.
When you onboard a new client, it may be beneficial for you to offer information about the scheme and eligibility upfront, so that clients can begin a dialogue with your team about preparing a submission, if eligible.
For existing clients, you know best what they need, their goals and the work that they do.
For example, if you’re providing tax planning services to your clients, this is an excellent opportunity to encourage them to review their work in partnership with your team and identify areas of potential R&D.
Examine and identify eligibility
This can be the toughest part of the pre-submission process, because the definition of R&D for tax purposes is deliberately broad to encourage valid claims from all sectors.
However, this has historically led to an upswing in ineligible claims and a resulting crackdown by HMRC – resulting in some mixed messaging for your clients without some guidance from you.
At its core, R&D work must meet the following criteria:
- Seeking to address or overcome an uncertainty
- Must not be easily worked out by an expert in the field
- Take place in the fields of science and/or technology
- Must be original and innovative and not, for example, applying an existing technology in a new way.
Once these criteria have been satisfied, R&D tax claims can come from any sector. Some sectors do dominate the majority of claims, such as manufacturing, life sciences and chemical engineering – but sectors as wide-ranging as food and drink and fashion may be eligible.
Get ready to seek support
If R&D tax isn’t your firm’s area of expertise, you may well find that you need to seek external support from specialists in the sector.
Having undergone a period of significant change and with ongoing anti-abuse measures, R&D tax is complex and the subject of significant scrutiny from the Treasury, so preparing a valid claim is a must.
We can advise you on the best approach or receive a referral for your client directly, depending on what is most appropriate for you and your client.
What matters to us is that you and your client receive up-to-date information and advice, with a strong claim that incentivises their commitment to innovation.
For support with addressing R&D tax with your clients, please contact us to discuss your requirements and find out how we can help.
