Good Practice Marketing Standard

One of the biggest reasons that potential customers may be looking at your website is to learn more about the R&D scheme and whether they may be eligible to apply. The more information you give them, the better informed they’ll be – and the more likely it is that you’ll get to work with a company that a) has genuinely done R&D, and b) has realistic expectations about the process and its results.

We believe that good practice is:

• Referencing HMRC’s definition of R&D.

It’s good practice to make prospects aware that HMRC uses a very specific definition of R&D for tax purposes. You should refer to this and ideally provide a brief explanation of HMRC’s definition. You could even provide a link to HMRC’s website, so that interested readers can find out more.

• Using caveats when talking about eligibility.

Each prospect’s projects and company will be different, so it’s a good idea to use caveated phrases like “your work may be eligible” rather than blanket statements like “your work will qualify”. This gives your reader a more nuanced and accurate understanding about how the rules apply to them.

• Regularly fact-checking your site and marketing materials.

The R&D tax relief scheme changes fairly frequently, so it’s a good idea to regularly fact-check your website and other materials for statements, facts or figures that may need to be updated. This gives potential prospects up-to-date information and protects your credibility as an advisor.

Conversely, we believe that bad practice is:

• Making misleading statements about eligibility.

It is bad practice to misrepresent how the scheme works, or to give companies false hope about their chances of success. For example:

• • “Most businesses will qualify” isn’t true. There are around 2m actively trading limited companies, of which 90,000 were claiming R&D tax relief – and HMRC obviously believes that even that much lower number is too high.
  • “Everyday business can qualify”. HMRC does not agree that everyday activities qualify for relief. It typically argues that these are routine work for Competent Professionals and will exclude these activities from the claim.
  • “You can claim for improvements to your business processes”. This isn’t true, as business processes sit outside the scope of science and technology.
  • “If your product is new to market, you’ll qualify”. This isn’t true either. Whether a product is new to market is irrelevant; what matters is whether HMRC’s definition of R&D was met during the project.

• Giving false requirements.

An example of this is “You can claim for R&D tax credits if you have revenue of £2m+ and have been trading for at least 2 years!”. While this may generate the right type of leads for you, it’s also misleading about who can apply for the relief.

• Using scare tactics.

While it’s fine to highlight that companies may lose out on relief if they let a deadline pass, messages like “Government funds are running out, get your claim in today!” are misleading. There is no ‘budget’ or ‘pot’ of money reserved for applicants, and relief is paid to any company that can show it meets the criteria. Stating otherwise misinforms potential prospects about how the scheme works.

• Misrepresenting your level of influence with HMRC.

HMRC used to chair a meeting called the “R&D Consultative Committee”. However, they realised that this implied a more two-way dialogue than in fact existed, so changed it to “R&D Communication Forum”. Using phrases like “We sit on HMRC’s Consultative Committee” or “We advise HMRC” should be avoided, as they imply a greater level of influence than you typically have. Similarly, you should not use phrases like “HMRC Approved” or “Endorsed by HMRC” – HMRC aims to be strictly impartial and does not confer endorsements on individual providers.

• Encouraging prospects to believe that you will do all the work.

While you obviously want to be seen as offering a convenient and valuable service, the most robust R&D claims are those where the client is closely involved. They need to have a thorough understanding of the scheme and be able to articulate why their projects qualify. Creating the impression that a robust claim can be prepared with only superficial involvement from them (e.g. “You don’t need to do any of the work!”) is misleading and likely to result in claims that are easily challenged by HMRC.

• Claiming 100% success.

HMRC has started to write to advisors to point out that it follows a ‘process now, ask questions later’ model. In other words, claims may be processed without issue but overturned later if the work is found not to qualify. Even if all your claims are processed without query, they are still at risk for at least a year after submission. This means that ‘no win, no fee’ messaging should be used with caution: while it’s very clear what you mean, it may reinforce the misperception that a processed claim is a successful claim.

Another reason not to use the 100% success metric is because it could be interpreted as you not having much experience. Experienced advisors know that if you prepare enough claims, eventually a few will be adjusted or refused by HMRC. Claiming 100% success may therefore diminish your credibility with people who understand how the R&D market works.

It takes a lot of time and expense to build a team of R&D specialists, so many business owners are understandably wary about listing staff on their website in case they are approached by recruiters. On the other hand, SMEs looking at your site will be trying to gauge your level of experience and expertise – which will be much more difficult if they can’t see who would be undertaking, or responsible for, the preparation of their claim.

With this in mind, we believe that good practice is:

• Showing the senior members of your team.

Giving the names and bios of your senior leadership team allows potential customers to form a more accurate judgement about your level of experience and sector-bias. If you feel comfortable doing so, you could also list some of your key senior staff so that potential customers have more information about who they’d be working with.

• Using identifiable testimonials.

For each testimonial, show the full name of the person who provided the quote and the company they worked for when they gave it. This allows potential customers to independently talk to your customers about their experience of working with you.

• Highlighting your membership of The R&D Community.

You are part of an organisation that is doing everything it can to raise standards in R&D tax relief, and which gives you access to specialist training and support. Highlighting this to your customers gives them comfort that they are working with an advisor who is up to date, well connected and well supported.

• Being transparent about ex-HMRC staff on your team

Employing ex-HMRC staff in your R&D team can give claimants a sense of security that their claim is being prepared or reviewed by people that have experience of HMRC. Being transparent about who these people are gives claimants the chance to check the relevance of their time at HMRC. So, if your website mentions that your team includes any ex-HMRC tax inspectors, you should say who those inspectors are and how exactly they are involved in preparing or reviewing claims.

Conversely, we believe that bad practice is:

• Using testimonials without permission.

It goes (almost!) without saying that each customer testimonial on your website should be approved by the person who gave it. They should be aware that you are using their statement and should have given consent for you to do so.

• Providing anonymous testimonials.

Attributing only a first name (or no name at all) to a testimonial makes it impossible for a potential client to verify it. This may raise concerns that the testimonial is not genuine.

• Using testimonials that suggest you are boundary-pushing.

An example of this would be highlighting that you claimed £100k for a nursery. Most knowledgeable prospects would be deeply cynical about this, and the testimonial may scare people away rather than reassure them. Similarly, showcasing your success in areas like pubs, restaurants, care homes (or any other sector identified by HMRC as unlikely to contain R&D) is likely to undermine your brand’s credibility.

• Not showing anyone in your team.

Not giving any details of who is running the company or preparing the R&D claims makes it difficult for potential customers to know and trust you. It’s a truism that people buy from people, so showing your key people can help you build trust with prospects by giving them better information on which to make a buying decision.

• Overstating your team’s size or experience.

It’s tempting to overstate the facts to make your company look good, but this can backfire when potential customers do their due diligence. For example, don’t claim that you have hundreds of staff when your accounts on Companies House show a much smaller number. Make sure that any claims you make about your team’s size and experience are consistent with information in the public domain.

• Misrepresenting your membership of The R&D Community.

We’re always delighted for you to mention us, but please don’t misrepresent your membership. For example, intentionally giving prospects the impression that we independently review all your claims (when we don’t) isn’t accurate or ethical. Please be honest about your relationship with us and the services we provide to you.

If you’re concerned about whether following this marketing standard will constrain your business, we’d argue exactly the opposite – that it will increase its value and longevity.

Good marketing generates good prospects, which lead to good clients, which lead to good claims, which lead to a good relationship with HMRC, good testimonials and yet more good prospects. So much starts with and depends on how you market your R&D service.

The benefits of following our marketing standard are:

• Less unwanted attention from HMRC.

We know that HMRC look at claimants’ websites as part of their risk assessments, so it’s likely that they also look at the websites of R&D providers when deciding how to allocate their compliance resources. If your site is free of statements that would concern HMRC, that could help to protect you from targeted enquiries.

• More respect from other advisors.

There is more and more pressure on advisors to be seen as reputable and responsible. Following our marketing standard makes it much less likely than your messages will be singled out by other advisors and used as bad examples on social media.

• More consensus and level playing field.

When more advisors adopt the same high standard of marketing, it makes it harder for those who don’t to win new business. This will establish a new and more level playing field, in which advisors are broadly using the same (higher quality and more accurate) marketing messages.

• Better educated clients

A huge benefit of following our marketing standard is that the leads you generate should be much more informed about how the scheme works and their role in the process. This means that you’ll spend more time talking to people with strong claims, and less time dealing with companies that have no, or very weak, eligibility.

Ethical marketing is not just a buzzword; it’s really the foundation of a trustworthy and long-term R&D tax relief service. By being up-front and informative in your marketing, you’ll not only protect your brand but also contribute to a more robust industry with higher overall standards. This will hopefully lead to a more measured approach from HMRC and more trust between HMRC, advisors and their clients.

Here are some ways to further strengthen your business’ marketing messages:

• Our course “How to build Strong Ethics and Good Marketing Practice into your R&D Service” is a comprehensive solution to ensuring your marketing is effective and ethical.
• Our Good Marketing Practice Checklist is an easy-to-use tool that allows you to systematically analyse your marketing materials for problematic messages.
• Joining The R&D Community includes a free review of your website by our team of experts, along with all of the other benefits included in membership.