Do you need an R&D adviser at all?

The answer no adviser’s website leads with

A company can claim R&D relief without any adviser. The claim is made through the company’s own tax return, the Additional Information Form is designed to be completed by the company, and where a claim notification is required, the company can submit it. Nothing in the machinery assumes an agent.

We say this first because trust is the product in this market. If a firm cannot tell you plainly that you are allowed to do the thing yourself, its advice on everything else carries a discount.

When doing it yourself is sensible

Self-preparation works well when three things line up:

• A competent professional in-house who can write. The heart of a claim is a technical case: the advance sought, the uncertainties, why they were not readily resolvable. If your CTO or lead engineer can set that out clearly, the hardest part is covered.
• A simple structure. One company, UK staff on payroll, no grants, no contracted-out R&D across company lines, no group intensity questions. The fewer boundary rules engaged, the safer DIY is.
• Time and appetite for the mechanics. The AIF, the cost apportionments, the return entries and the deadlines are all learnable. They are also unforgiving of casual errors.

If that describes you, a reasonable approach is to prepare the claim yourselves against HMRC’s own compliance guidelines, and buy nothing more than a one-off review if you want a second pair of eyes.

When an adviser genuinely earns the fee

The honest converse. Advice tends to pay for itself where:

• The boundary rules are engaged. Contracted-out R&D, overseas workers, grants, connected companies, the intensity test, the PAYE cap. These are where the money moves and where confident amateurs get it wrong in both directions.
• Nobody in-house can carry the technical narrative. Not because the work is weak, but because the people who did it cannot spare the days, or write in claim terms. A claim that undersells real R&D is as wasteful as one that oversells thin R&D.
• The claim will face scrutiny. First claims, payable-credit claims and large step-changes in claim size attract attention. If an enquiry would hurt, the case for having the claim built to enquiry standard from the start is strong.
• You have been burnt before. Companies arriving from a bad experience elsewhere usually need the past claims reviewed honestly, including the possibility that something needs correcting, before the next one is filed.

The decision in four questions

1. Can someone here explain, in writing, what we tried to achieve and why it was technically uncertain? If no, you need help with substance, not just paperwork.
2. Do any boundary rules apply to us: contractors, overseas, grants, groups, the cap? If yes, the cost of an error probably exceeds a fee.
3. Would an enquiry be survivable with our current records? If not, fix the records question first, with or without an adviser.
4. Is the likely relief small? Below a certain size, any fee is a large share of the value, and DIY or not claiming may simply be proportionate.

Sources

1. HMRC, Additional information you must submit before you claim R&D tax relief, gov.uk
2. HMRC, Help to see if your work qualifies as Research and Development for tax purposes (GfC3), gov.uk
3. HMRC, Tell HMRC you want to claim R&D tax relief (claim notification), gov.uk