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Accountants’ R&D tax claims software: What it is, how it works and what you should know

Jenny Tragner 2019
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As you delve into R&D tax credits, you’ll quickly realise the sector is filled with all sorts of claims, approaches and differing philosophies. It can be altogether quite confusing.

Indeed, a big part of what ForrestBrown does is educate accountants about what they and their clients should expect when claiming the incentive. In previous articles, we’ve explained the minimum standards any accountant or business should expect from a specialist R&D tax credit adviser.

But, of course, not everyone claims with an R&D tax credit adviser. Many accountants claim R&D tax credits in-house on behalf of their clients. Some accountants prefer this set-up because it keeps the clients’ account all in one place, ensuring they can control the client experience end-to-end.

Traditionally, this DIY-approach is done with good old-fashioned spreadsheets. While most accountants do a more than adequate job of claiming R&D tax credits, the issue is time. The process can be time-consuming, and when you’re already juggling other aspects of your clients’ finances, it’s time you can’t really afford.

R&D tax claims preparation software

A new type of software has recently entered the marketplace ostensibly offering accountants a half-way house between DIY and specialist advice.

What you ultimately get for your money is the automation of some parts of the process. Instead of outsourcing R&D tax credit claims to a third-party, the idea is that the accountant can keep claims in-house while diminishing the time investment required.

The software will, for instance, make it easier to generate reports in the format required to make an R&D tax credit claim. To be clear, this automation is a nifty feature – but it does gloss over some of the nuances inherent to the R&D tax credit incentive.

Making an effective R&D tax credit claim 

As we pointed out previously, if an R&D tax credit adviser charges a bargain bin price, then that adviser will need to dilute its service in some way to make a profit. This is a simple economic reality.

A similar principle can be applied to R&D tax claims preparation software. But you do get what you pay for. While software might spare you some of the administrative pain of an R&D tax credit claim, it does still leave a lot of the heavy lifting to you.

As you’re probably aware, an effective R&D tax credit claim is built on an understanding of what your client does. A task easier said than done in some cases! This information gathering and the writing of the required technical narrative is laborious.

While any R&D tax claims software for accountants might purport to take a smaller slice of the pie, the total pie might end up much smaller than when the business is reviewed in detail by a specialist adviser.

Any software would leave the task of understanding qualifying projects and providing technical narratives on your lap. These can be complex and are, usually, the most time-consuming part of the work ForrestBrown does for our clients.

It’s not just the writing aspect. It’s gathering the relevant information, speaking to the relevant experts, condensing it into an understandable narrative for HMRC and vetting the document for quality and accuracy.

That’s why ForrestBrown has invested and continues to invest, in a multi-disciplinary team of chartered tax advisers, industry sector specialists and former HMRC R&D tax credit inspectors.

What R&D tax claims preparation software can (and can’t) do:

Can:

  • Provide you with a template for the supporting claim documents.
  • Help you understand what additional information HMRC needs alongside the CT600
  • Reduce the risk of spreadsheet errors.

Can’t:

  • Work with internal experts and professionals to capture the full value of the R&D tax credit claim.
  • Offer advisory and planning services.
  • Establish a good working relationship with HMRC on you and your clients’ behalf.
  • Vet and check your client’s R&D tax credit claim to the same standard as a former HMRC tax inspector.
  • Flex the claim preparation process to suit your business.
  • Monitor the quality and veracity of the content you’re including in the R&D tax credit claim (increasing the likelihood of an enquiry).

Clients want R&D tax credits

Given the generous nature of the incentive (and not to mention, the cashflow problems many UK businesses are currently enduring), it’s unsurprising your clients want to claim R&D tax credits.

There’s a pressure on you to deliver a good, valuable experience to your clients. Not to mention the regulatory obligation on you as a member of a professional body to ensure you have the capability and specialist expertise within your practice that you need to deliver this service.

While self-claim R&D software might give you added capacity through automation, it doesn’t address the difficulty of effectively understanding your clients’ hard work and getting every penny they deserve.

Software might automate some of the moving parts, but creating claims that pass muster will still be entirely up to you – unless you work with a specialist R&D tax credit adviser, of course.

While any R&D tax claims software for accountants might purport to take a smaller slice of the pie, the total pie might end up much smaller than when the business is reviewed in detail by a specialist adviser. Cheapest does not equate ‘best value’.

It’s also worth remembering, however, that this doesn’t have to be an ‘either/or’ scenario. Not all advisers require you to do absolutely everything with them. ForrestBrown can absolutely offer an end-to-end service, but we also offer flexible advisory services that will enhance your service delivery (rather than replace it).

Understandably, many accountants are concerned about clients getting poached. If you don’t offer R&D tax credits as a service line, it’s likely a rival will. But by partnering with a specialist R&D tax adviser, which does absolutely nothing else, you can offer world-class service, easily and affordably.

Don’t settle for less than the best. Self-claim software might promise automation and simplicity, but the best claim result for a client is unlocked by working with the best specialist. Speak to ForrestBrown today about our accountancy partner programme.