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Accountants need to beware of spurious R&D tax credit advisers

Director & Head of Policy
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Many accountants don’t like specialist research and development (R&D) tax credit providers. As I recently explained in Accountancy Age, they’ve got a point. You probably didn’t expect to hear that from me, a director at the UK’s biggest R&D tax credit consultancy – but allow me to explain.

I’m passionate about my work and how R&D tax credits can help British businesses grow, hire and thrive (especially in the wake of the COVID-19 crisis). But even I must admit that my industry has become a marshland of spurious providers who over-promise and under-deliver.

The lucrative nature of the tax credit means providers have popped up like dandelions during the Summer months, hoping to seize on the excitement around the incentive. But these slapdash advisers are motivated by a quick buck, not the client’s best interests.

 

Outsourcing in accounting report

A clear trend emerged in our recent report on outsourcing in accounting: Accountants attitudes to external partnering have shifted. Instead of cheap and cheerful – outsourcing your bookkeeping to the Far East, for example – the profession is now seeking outsourcing partners who can offer expertise and services that add value for their clients.

Accountants want to outsource complex specialist services, like R&D tax credits. Now, many R&D tax credit providers like to downplay the risk aspect of claiming the tax credit. Indeed, many are loath to even mention the ‘tax’ aspect inherent in the incentive.

When that happens, alarm bells should be ringing. Any provider trying to conceal tax legislation and tax advice behind a veil of marketing should be avoided. Tax is not a game for amateurs and anyone pretending otherwise is not paying proper attention to pitfalls.

In recent times, I have seen a change of tack from HMRC. The tax authority’s emphasis has shifted from raising awareness of the incentive to policing quality. It’s a step-change that I personally welcome. There’s no excuse for sloppiness.

Accountants know best

You know what’s best for your client. You spend your working hours (and, let’s be honest, some of your precious private time, too) looking out for their interests. Choosing the best outsourcing partner is part of that custodian role.

The implications of getting it wrong and making a bad recommendation are severe. It will impact on your relationship with your client if it goes pear-shaped. So, if the market is a minefield, why not just do this all in-house?

Not so quick! In our outsourcing report, nearly two-thirds (59%) of respondents did not consider themselves well placed to offer a strong R&D tax credit claim service to clients. An award-winning provider can take this off your hands.

Work with you, not against you

Make no mistake, spurious providers are cold-calling your business clients as you read this. You might be avoiding the topic, but if your client is lured into working with a fly-by-night R&D tax credit firm, you lose control of the situation.

In a worst-case scenario, you could receive an R&D report that contradicts the accounts you’ve taken great care to prepare. That’s not a game any accountant wants to play. It’s a tightrope accountants have to walk, simply avoiding the topic of R&D tax credits or trying the DIY approach isn’t the answer.

The answer is finding a partner that will match and complement your own professionalism. Working in close alignment with our clients’ accountants is a key part of the ForrestBrown method.

Find out more about our R&D tax credits accountant partner programme.

R&D tax credits are all we do. We have zero interest venturing beyond our expertise. When you pass a client onto us, they’ll receive award-winning service from chartered tax advisers, sector specialists and ex-HMRC inspectors.

Broadly speaking, it’s more important than ever that the UK can nurture our innovative businesses and attract foreign businesses to our shores. The EU safety net is going away. It’s up to us – and as R&D tax credits take centre stage, your clients have to get their compliance spot on.

Want to protect your clients (and yourself) from spurious R&D tax credit advisers? Speak to ForrestBrown today: we are the UK’s leading specialist R&D tax credit consultancy.