R&D Tax Reliefs: The Dos and Don’ts for Accountants

Accountants are facing greater R&D tax relief challenges than ever before.

The Radius R&D tax reliefs team at Shorts have put together a helpful list of "Do’s and Don’ts” for accountants managing R&D tax relief claims for their clients. We provide dedicated and qualified support and advice for accountants to help them minimise the risk of HMRC enquiries.

We hope this guide will help you understand what is now required for a robust and compliant claim. You are also welcome to contact our team for assistance if required.

Our full range of accountancy support services related to R&D tax reliefs can be found on our website.

If you have clients in your portfolio who currently complete an R&D Tax Credit Claim, here are the dos and don’ts.

The Dos: What you need to do for a successful R&D Tax Relief claim

Do stay up-to-date

There has been a plethora of changes to the R&D tax relief scheme since April 2023, including reductions in R&D tax reliefs and rates, mandatory reporting and notification requirements, and changes around subcontracting/subsidised rules, to name just a few.

Make sure your clients are aware of these changes and that they will need to maintain far more accurate and contemporaneous records for each R&D project they undertake, including allocating costs per project.

Do liaise with the right people

Ensure you liaise with the right personnel at the company who understand whether the project constitutes a scientific or technological advance.

HMRC’s latest guidance puts a lot of emphasis on the role of a “competent professional” in the claim process.

Do sense check the R&D report

If you are using a third-party R&D tax relief provider, where possible, ask for sight of the R&D report and apply a sense check to see if you feel it still stacks up. There are still many boutiques out there submitting error-strewn and fraudulent claims. As demonstrated by recent communications from HMRC. If you require a review to be completed – our team can help.

Do submit the “Additional Information Form”

Make sure that the mandatory “Additional Information Form” (AIF) is submitted to HMRC before you submit the Corporation Tax return. If not, HMRC will reject the claim and remove the R&D element from the return.

The Don’ts: Critical errors and issues to avoid

Don’t ignore rule changes

You must not ignore the recent rule changes or continue to submit claims as if nothing has changed.

What might have been processed by HMRC 2 years ago is far less likely to be processed now without it being reviewed.

R&D tax reliefs are facing a major clampdown by HMRC, and claims are significantly more likely to be enquired into.

Don’t do R&D tax relief claims without a qualified expert’s help

If you are submitting claims internally and don’t have an R&D tax relief expert in your team, then you will potentially be exposing your clients to a higher risk of enquiry.

The Radius team have worked with some accountants who are not fully versed in what would accurately constitute R&D for tax purposes, and we strongly advise against proceeding without qualified advice and potential training.

Now is the time to call in specialist support to help de-risk both your clients' claims and your business.

Don’t tackle an HMRC enquiry alone

If you find yourself under enquiry by HMRC, the level of information required is extensive. If you don’t feel you have the expertise to answer these questions sufficiently, we strongly recommend seeking advice and assistance. Our team would be happy to help, and have successfully defended all of our enquiries to date and where we have acted for another accountant.

Can we help you?

As HMRC ramps up scrutiny and makes more compliance checks into R&D Tax Relief claims, Radius has seen a corresponding rise in demand for consultancy services. This stems from accountancy firms seeking guidance after submitting claims for their clients or providing advice. The requests typically fall into three categories:

• Accountants facing HMRC enquiries into R&D tax relief claims
• Accountants seeking expert reviews and validation of claims for their clients
• Accountants looking to grow their internal expertise

The requests we receive share a common goal: de-risking R&D tax relief claims against the business at a time when risk is growing. If you believe your practice could benefit from this kind of assistance, we encourage you to get in touch today.