If your company operates with any level of development or innovation it is likely you have been approached by several companies offering to assist you in making an R&D tax claim. As with any service, there are good companies, bad companies and downright poor companies.
So how do you know who to work with? More importantly, who do you choose to represent your company and its hard-earned reputation. The costs of making the wrong decision could be significant.
Research and Development is a fantastic tax relief and rightly rewards companies who push the boundaries within their field. This significant benefit can be used to drive growth, foster innovation and promote learning.
However, as with any area of tax, there are rules, guidelines, legislation, and grey areas that have to be carefully navigated in order to obtain these benefits with minimal risk.
Can’t I use my accountant?
A lot of companies we talk to ask us this very question and the answer will depend on your accountant, their skill level and the kinds of work they undertake.
Generally, accountants are very good at producing financial statements, preparing VAT returns and dealing with day to day queries. However, they often do not have specialist departments or staff to undertake this kind of work. With up to a 100% penalty for getting a claim wrong, it is very much advised that companies use a specialist.
The following article was released by the PCRT which echoes this exact point.
Choosing the right adviser
Choosing a specialist can seem daunting as more and more companies pop up every day offering huge returns for no risk and boasting impressive records with no way for companies to check if these claims are accurate.
There are warning signs to look out for:
- The approach – some of these new companies bombard the market with generic emails detailing how you are missing out on tens of thousands in unclaimed tax money. How do they know that is true? Do they know you or your projects? Have they taken the time to look at your website to see if your work involves R&D? You can tell a lot about a company by the way they approach you. At HB we only ever approach companies that we feel would genuinely qualify for the relief.
- No references – can the company you are thinking of working with produce several references or clients that you can speak with to see if it is a good fit? If the answer is no, look elsewhere! It is very easy for a salesman to use great lines such as “we work a lot in your sector” or “we work with companies similar to yours” but can they prove it? Our team will ALWAYS offer you a reference from a similar company to yours so you can be confident you have chosen the right partner.
- Promising to complete claims with no director involvement – This is one we often see; a company will promise large returns with little director contact and more often than not without even having a meeting. This should be a red flag to all companies looking to complete an R&D claim. IT CANNOT BE AUTOMATED. It is a technical process and while we will do everything we can to minimise director and key employee time spent on claims, we need to get to know the company and the projects in order to convey your R&D to HMRC. We insist on an annual meeting to work through projects individually. This should be the minimum for any R&D claim submitted to HMRC. If this is not the case then you are exposing yourself to problems down the line.
Check out our working methodology here
Hamilton Blake’s standards
When it comes to R&D tax advice, there are three primary principles which we follow consistently:
The guidance confirms who is covered and for which services. Any member of one of the PCRT bodies (CIOT, ATT, AAT, ICAEW, ICAS, ACCA, STEP) must adhere to the PCRT guidance. Similarly, any advice which relates to an R&D tax relief claim by any business is subject to the PCRT guidance. This also means that an R&D tax adviser should be meeting their regulatory obligations, such as anti-money laundering (AML) and GDPR compliance. We meet all regulatory standards.
You expect exceptional professional conduct between and an adviser and a client. We strictly follow the clear guidance on how R&D tax advisers should conduct themselves. Examples are: clearly explaining risks, record keeping and sharing of documents. We do not make exaggerated or false claims on our website or marketing communications.
R&D tax is a specialist area. Any provider of advice must demonstrate an ability to give specialist advice. Our team are experienced and trained in R&D and show competence in all we do.
If you would like to know more about what we do, the way we do it, and why HB Consulting might be the right partner for you, contact us today.