Between House of Lords inquiries, cuts in the rates of relief for SMEs, big changes arriving from April 2023, and the Government aiming to create a single, unified scheme from 1 April 2024, there has never been more to think about if you’re working in R&D tax relief. And that’s not even the worst of it.
Major challenges facing R&D advisors in 2023
While it’s always difficult trying to keep abreast of changes, the big issue that suddenly hit R&D advisors over the past few months has been HMRC’s change of pace in enquiries.
Previously, these were rare and relatively sedate affairs. They’d typically stretch out languorously over the months, with the advisor and HMRC exchanging letters, horse-trading over which parts of a claim were allowable, and eventually coming to a resolution in which the claim was largely accepted, but perhaps with some expenditure taken off the table.
HMRC’s new approach to R&D enquiries
This is very different from HMRC’s current approach. As advisors up and down the country are now discovering, HMRC is now routinely trying to deny relief on the whole claim using a number of pre-prepared arguments. These are often subjective and opinionated, making them particularly hard to argue against. For example, it’s common for HMRC to attempt to deny relief on the basis that:
- the company’s staff were not Competent Professionals in the area of the advance,
- Insufficient evidence has been provided (even after you’ve provided reams of written statements from the client),
- The client can’t provide any ‘contemporaneous evidence,’ so there’s no proof the project took place,
- In their opinion all the work appears to be ‘readily deducible’ to a Competent Professional,
- Similar advances have already been made by other companies, so the client wasn’t advancing science or technology.
There are lots more, but you get the idea. It’s almost as though HMRC has spent a lot of time training its caseworkers on how to say No to a claim, without training them in how to say Yes.
R&D enquiries are not hopeless!
But this doesn’t mean all enquiries need end with a complete rejection of relief, and it’s still possible to have some projects accepted. It is, however, an order of magnitude more difficult than it used to be, which is why R&D advisors are starting to converge into mutually supportive groups in order to share their knowledge and experience.
Why it’s important to find support from your industry peers
When you’re preparing claims for R&D tax relief, it’s only too easy to feel isolated. You can’t easily see what other advisors are doing, and very few speak openly about the issues they’re having with HMRC. That usually leaves you with that nagging feeling that what you’re doing is probably right…but you’re not 100% sure.
Community is the antidote to isolation
When you join a community of like-minded people, everything suddenly feels better. All those worries you had? It turns out that everyone else has had them too. And as most people in the community tend to think along similar lines (after all, that’s why they joined in the first place), they tend to help each other out.
This means that you can ask questions and get answers from people with a broad range of experience. And when it’s your turn to provide the expertise, people will be grateful for your insight. It’s a nice feeling to help others, especially when you benefit in the same way as they do.
The problem is, aside from the occasional group on LinkedIn, there weren’t many communities like this. Until we started The R&D Community!
How can a community help you with R&D tax relief claims?
There are a number of ways that our members help each other inside The R&D Community. The most immediate is our customer-only WhatsApp group. Even if you don’t pipe up very often, this is a great way to keep your ear to the ground. You can learn a lot just by listening to what more experienced advisors are discussing. These discussions can involve commercial models, tactics for defending enquiries, or in-depth technicalities in the scheme or legislation.
Community offers real ROI
One of our members said this not long after joining us:
The WhatsApp group has been worth the price of admission on its own!
– Steve Morfill, Mr Tax Ltd
Networks are the best way to find partners for R&D claims
Another form of community support comes from the variety of people and firms who join. Some are larger companies looking to expand their teams, while others are much smaller outfits looking to provide their services to larger companies. It’s often a natural fit.
So, if you’re looking for a new person for your team, the chances are that person might already be within the community. (We’re not talking about poaching staff, of course, but of finding good partners within our membership.)
And there’s another benefit. As the Community grows and becomes better known, external consultants are increasingly approaching us and asking if we know of anyone who’s hiring. We’ve already helped several people to find new roles, which not only gave them a new job, but helped our members who’d been looking for new staff.
Are you ready to join The R&D Community?
With so much change on the horizon, and HMRC’s approach to enquiries so controversial, now is not the time to be sitting on the side lines. Joining a community of like-minded R&D advisors gives you many advantages and opportunities that you wouldn’t get otherwise.
You don’t just get access to other people. The R&D Community also gives you access to
- a range of specialist online courses
- an R&D Helpline that answers questions you might not want to post in the group
- monthly training webinars,
- a Claim Support service for when you need specific tasks done on your behalf (like risk-reviewing a claim, assisting in an enquiry, or interviewing a client about their projects).
We’ve built a whole ton of resources and courses specifically to help you in your role as an R&D advisor. If you’d like to learn more, you can download our Prospectus.
Is it a good fit for you?
The R&D Community is a good fit for advisors who care about the standard of claims they are submitting. Our members believe in ethical practise, and are committed to ongoing learning and improvement. If you care about doing a great job for your clients and sticking to HMRC’s guidance on what’s eligible, then we’d be delighted to welcome you! You can sign up online today!
