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Is now the time to add R&D tax as a service line?

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Author: Tom Mason

Despite its power to incentivise innovation, many accountancy firms have steered clear of R&D tax in recent years due to its complexity and plethora of changing legislation – but things are now changing.

If your accountancy firm doesn’t offer R&D tax services, this might just be the right time to take the leap and help your practice stand out in the market.

The calm after the storm

We have now entered a period of stability for R&D tax following sweeping reforms made in the 2023 Autumn Budget, with many enacted from 1 April 2024.

As a result of the increasing complexity of the scheme and growing scrutiny from HMRC, many accountancy firms and tax teams stopped offering an R&D tax advisory service. This came down to several factors, including:

  • The time and expertise required to navigate claims
  • Difficulties with a minority of external advisory firms
  • Reluctance among business clients to make a claim.

However, now these challenges are receding, this could be the ideal time to return to, or introduce, your R&D tax services.

As businesses seek to understand the merged scheme and new compliance regulations, a reliable advisory service is exactly what they need.

You may find that providing this specialist support wins work in more than one area of your firm as commercial clients seek out advice on the latest legislation.

The future of R&D tax

R&D tax is likely to grow in significance in the coming years as both the Government and private investors set their sights on sustainable technologies and other high-growth science and technology sectors.

As the UK’s R&D output increases, so too will the need for reliable R&D tax advisory services that prepare claims and provide advice with integrity.

Entering this R&D tax market now is a great opportunity to build your reputation and grow your client base.

Accessing the right expertise

Without R&D tax expertise within your tax team, we always recommend that you seek support and avoid going it alone.

Although further major changes seem unlikely, the R&D tax scheme itself is more complex now than in previous iterations. It also carries additional compliance requirements, such as the Additional Information Form (AIF) – as well as changes to the rules around certain qualifying costs, including contracted-out R&D.

To get your advisory services off to the best start for your firm and for clients, don’t hesitate to seek external advice from the R&D tax experts.

Our experienced advisory team can support your R&D tax services with the latest insights and sector-specific advice. Contact us today to kick off your new service line.