How can R&D tax relief claims be factored into the innovation lifecycle?

R&D tax relief claims can sometimes feel like a way to round off a project and might be seen as a time to reflect on what was achieved and consolidate information.

However, a more proactive approach can be beneficial and may enable accountants to better help clients with R&D.

Knowing how and when to begin working on an R&D tax relief claim can make a notable difference in the preparation of the claim and the ease with which it can be defended during an enquiry.

When is the best time to start preparing for an R&D tax relief claim?

The best time to start preparing for an R&D tax relief claim is immediately after the previous one was submitted or when a new project is being discussed, whichever happens first.

It might seem odd to be thinking so far ahead, particularly if the eventual R&D tax relief claim is set to cover two accounting periods, but the earlier it is considered, the better.

Accountants providing R&D assistance can be the ones to start conversations with clients about engaging with R&D tax relief claims, as they are more likely to be having regular contact about other matters.

HMRC requires a reasonable level of evidence for every R&D tax relief claim and it is vital that valid claims are able to withstand the scrutiny that comes with an enquiry.

While it is entirely possible to retroactively gather the evidence needed for the claim, it is easier to build stronger claims when the evidence is more robust.

This might mean encouraging competent professionals to make more detailed notes throughout the project, charting the attempts to resolve uncertainty and why they may or may not have worked.

Timesheets for hours spent engaging with the R&D project can allow for a more accurate apportionment of costs, while recording how and when consumable items and energy were used in the process can be beneficial.

Can R&D tax relief claims lay the foundations for future research?

In multiple different ways, R&D tax relief claims can aid an innovative business in taking the next steps towards achieving a new advance.

The most obvious way in which this happens is by giving the business funding that it would likely otherwise not receive.

On a more practical level, engaging with an R&D tax relief claim to the fullest extent should empower businesses to take R&D more seriously.

By having detailed notes to look back on and discussing the triumphs and challenges of previous research, inspiration may strike the competent professional who can then apply the lessons learned to the next piece of research.

It is possible for one R&D tax relief claim to act as a sequel to a previous one if a project is picked back up in the following accounting period, provided enough novel work occurs and the new stage of research meets HMRC’s criteria.

Most importantly, having a better awareness of how time and money are spent engaging with R&D could help businesses to be more efficient in their approach.

This is where accountants can add great value to their R&D tax relief clients by encouraging the same level of engagement with R&D that is often encouraged with finances.

Like with a tax return, leaving everything to the last minute and then trying to gather up all the information and evidence is seldom a good idea.

Ongoing reviews and considerations can allow for a more dynamic approach to finances and a more effective approach to research.

Our expert team of R&D tax consultants is on hand to help accountants with R&D by showing the ways that clients can be more engaged with the process.

Building in R&D tax relief considerations to the innovation lifecycle should make it easier to submit an R&D tax relief claim with the original tax return – something HMRC prefers over submitting it with an amended tax return.

With experience across a wide range of sectors, our professionals know how to enhance the R&D tax relief process and can support your clients in safeguarding claims with more robust evidence-gathering techniques.

Speak to our team to discover more ways to support your clients with their R&D projects.

Adam Bointon

Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and HMRC requirements.