Why should I use R&D specialists instead of my accountant? Prospective clients ask us this question a lot. We can understand why; accountants often tell businesses they can claim research and development (R&D) tax credits on their behalf at minimal cost. Some firms may even offer this service for free.
Surely, you just have to fill out an extra couple of boxes on your Corporation Tax Return? So why pay R&D tax relief specialists to perform the work for you? We can think of five reasons.
Accountants rarely offer specific R&D services
Government statistics show nearly £2.9 billion of tax relief was provided across 26,255 R&D claims in 2015-16. This suggests the average claim was worth more than £110,500. Wouldn’t you feel more at ease if a specialist was handling a claim of this size?
We think accountants do a fantastic job. In fact, we work very closely with highly qualified accountants to help support our clients. However, R&D tax credits are a complex part of the corporation tax system and involve a lot of work behind the scenes.
Accountants may have a basic understanding of the area, but they are unlikely to offer the breadth and depth of service required. Some may simply file the information you’ve already provided along with any supporting documentation.
Maximise the size of your claim
If you’ve read our blog before, you’ll probably already know some of the factors that HMRC weighs up when ruling whether or not a project qualifies for R&D tax credits. You’ll also know that many claims fall into confusing grey areas, with plenty of ifs, buts and maybes potentially scuppering your tax relief.
Perhaps you’re confident that your project will qualify? Maybe you’ve received tax credits in previous years? You may still not be up to date with the latest regulatory changes. The rules surrounding R&D tax credits are amended almost every year, which could mean missing out if you’re not au fait with new developments. R&D tax specialists are well versed in every aspect of the system, helping you maximise your tax relief with each claim.
Reduce your risk exposure
Relying on an accountant to file your R&D tax credits basically places all the risk on your shoulders. After all, you’ll likely be the one collecting the relevant information, putting together the claim and providing supporting documentation.
But what if you make mistakes? You could face a HMRC enquiry, which is time-consuming, stressful and may result in your entire claim being rejected. The enquiry process can take several months for particularly complicated claims.
Firms that specialise in R&D tax relief work on success fees, meaning they only get paid if a claim is approved. You’ll benefit from lower risk and your R&D specialists will be strongly encouraged to pull their socks up. A win-win situation!
Receive sophisticated HMRC enquiry support
R&D specialists are deeply knowledgeable about science and technology, enabling them to prepare a technical narrative that will present your project in the best light. You can rest assured that the chances of coming under the HMRC’s watchful gaze are minimised.
Unfortunately, that’s not always the case, and some claims may not receive immediate approval. This is where a specialist firm can really shine, as accountants rarely offer assistance in fending off HMRC follow-ups. If you use an R&D tax expert such as ourselves, we will provide an end-to-end support service all the way from answering initial HMRC questions ( to clear up inconsistencies) through to a full enquiry. We can even prep key members of your finance and tech teams to handle even the trickiest of audits.
Free up valuable resources
Every second you or your finance teams spend on R&D tax credit claims could be better spent growing your business. Whether it’s researching how to qualify, collecting the necessary internal information or communicating with your accountant, there are significant opportunity costs.
You’ll also have to factor in the time that you could have to spend dealing with a HMRC enquiry should things go wrong. Enlisting the services of an R&D tax credit specialist means you can avoid these headaches, while still having peace of mind that your innovative projects are effectively subsidised. We don’t believe there are many – if any – accountants outside of the major accounting firms that can offer this level of service.
The bottom line
You may be tempted to ask your accountant for support with R&D tax credits. If they’re offering their assistance for free, we don’t blame you! However, you could be missing out on tens of thousands of pounds or more by failing to seek help from a specialist.
R&D tax experts may be more expensive, but they can maximise your tax relief, mitigate risk, handle HMRC enquiries and provide a range of other niche services to optimise your claims. Choosing the cheaper option may be short-sighted and could end up costing you more in the long run.
Would you like to learn more? We’d love to hear from you, so please get in touch with a member of our team today.