Whether a client approached you about R&D tax relief or you raised it with them, the next step is seemingly choosing between doing any claims in-house – or outsource it to a specialist R&D tax adviser.
In reality, the choice isn’t quite that black-or-white. There’s a ton of choice available in the R&D tax advice market and many high-value, professional advisers can and will work on your terms. That could be doing all your eligible clients’ R&D claims, helping with specific specialist sector claims (like software) or intricate consultancy (like HMRC enquiry support).
This article will reveal the eight things you should expect and ask for from any R&D tax adviser you engage. This level of service should be seen as a minimum. Using our own service offering as a guide, I will explain how (and why) we do these things and why they make a big difference to you and your clients.
Find out more about ForrestBrown’s R&D tax relief accountants partnership programme.
Actively support you in finding R&D among your clients
A high-quality R&D tax partner will always offer to help you and your staff proactively identify any qualifying R&D among your clients.
ForrestBrown, for example, will (with your permission, of course) do a client list review. The list can be anonymised if you’d prefer. This will help you identify all potentially relevant clients – and creates an easy way for you to offer added value.
We can offer our partners workshops and training with staff (as we did with our accountant partner BSG Valentine). ForrestBrown’s R&D tax credit experts can provide training to educate your team on the nuances of R&D tax and how to add value to clients.
R&D tax advice incorporates fields of knowledge from beyond the tax realm. R&D happens in all sorts of industries and often, the innovation in questions can be complex to a non-specialist. That’s why ForrestBrown has a team of sector specialists on staff.
Our sector specialists – with decades of real-world/industry experience in engineering, science and software – work with businesses on a peer-to-peer level.
Not every adviser has sector specialists. The scope for mistakes in R&D tax is quite large, or that some valuable costs and activities could be overlooked. A specialist adviser will enable you to offer this level of specialist expertise to your clients without having to hire them yourself.
Your time investment
Specialist R&D tax support should make the process much less time-intensive for you. That means taking the technical work off your hands entirely (if that’s what you want).
Many advisers drop all of this technical work on your lap, with DIY spreadsheets, rudimentary templates or software portals for capturing financial information. Some advisers require the client to identify their own R&D projects or write project narratives.
Safe to say, this widens the scope for mistakes and misunderstandings with HMRC. And swallows up your valuable work time.
Not every accountant is seeking a specialist to do all their clients’ R&D tax claims. Perhaps you do R&D claims in-house already. But R&D, as mentioned previously, is a highly specialist area that has recently undergone significant HMRC changes.
In certain cases, you might be working with a client doing highly specialist work (like software R&D claims, for example). Or perhaps you’ve got a client facing HMRC enquiry that’s meandering on with no end in sight. ForrestBrown can work with you flexibly on a consultancy basis to support these areas.
We can offer you technical sector support for specific claims, enquiry support or just about any other ad-hoc support you and your client require. This includes more niche aspects like setting up or adjusting a company or group structure most appropriate for claiming R&D tax relief.
Often ForrestBrown works with large practices that require support on a specific aspect of R&D tax relief, with a specific client, on a fixed (or ad hoc) basis. It’s never all or nothing, and you are in control.
HMRC scrutiny of R&D tax relief claims is at an all-time high. This means that HMRC enquiry support is an absolute must-have.
Look very carefully at any clauses which restrict the support your client will receive from an R&D adviser in the event of an enquiry. Some R&D tax agent contracts will include clauses that allow them to:
- Charge additional fees
- Exclude any enquiry support
- Limit their unpaid enquiry involvement
Enquiries can be highly complex and time-consuming. If one opens and your client is not adequately protected, it’ll likely mean a big headache for you.
If ForrestBrown prepares an R&D claim then our full R&D tax credit enquiry support service is included in the fee. This gives your clients direct support from our most experienced professionals: chartered tax advisers and accountants, tax lawyers, sector specialists and ex-HMRC inspectors.
Many accountants feel R&D tax relief claims are a bit of a black box. Sometimes the first time you’ll hear about a client’s claim is when it’s long since underway. For obvious reasons, this is sub-optimal.
As your clients’ adviser, you need visibility of their full tax affairs. A formal arrangement with a specialist R&D consultancy enables this. It affords you a measure of control – and a reputable adviser will always work with you and your client transparently.
No dodgy contract terms
The devil is in the details. Many R&D advisers will want to lock you or your client into a multi-year contract. The disadvantages of this are obvious: If things go south, you’re stuck with a bad adviser. Often, getting out requires a penalty fee.
The best approach is to work with an adviser on a rolling basis. This is how ForrestBrown operates. You only have to engage us or refer to us for as long as you’re satisfied with our service. We’re confident that our service will speak for itself.
Also, keep a close eye out for how advisers charge. In some cases, the fee is a percentage of the qualifying expenditure rather than of the benefit itself. It may appear to be a lower amount but it’s a sleight of hand.
It could be a nasty surprise for a client down the road when the time comes to pay. At ForrestBrown, our fee is calculated based on the final benefit you receive from HMRC.
Regulated and a well-established relationship with HMRC
From our conversations with accountants, ForrestBrown knows many of you are fearful of spurious advisers. This concern is well-founded. But it’s important to remember there are reputable, professional advisers out there, too.
There are two key hallmarks of a reputable adviser: it is regulated and it proactively works with HMRC. As accountants well know, tax advice is only partially regulated. Many R&D tax advisers are unregulated.
ForrestBrown, on the other hand, is a regulated member of the CIOT. We also work in close partnership with HMRC to lead on and shape R&D tax relief policy. We believe in the power of this incentive and we want to improve it for everyone.
Take control of R&D tax relief
The absolute best thing any accountant can do concerning R&D tax relief is to be proactive. Awareness of the incentive is high among UK businesses and your clients get cold calls and emails from R&D advisers every day making big promises.
To protect your clients – and to spare yourself a big headache! – you must take the lead. When you do that, it’s not just a risk elimination exercise: it’s a simple way for you to add extra value to your client relationships.
R&D tax relief is a niche area of tax. Even if you do claims in-house, it’s worth identifying an expert to approach if you ever need any help (with a HMRC enquiry or a specific, highly technical claim, for instance).
ForrestBrown can work on your terms. Our only focus is R&D tax relief. We can handle this one particular facet while you get on with serving clients elsewhere.