R&D Tax Relief – Transparency and a Mutual understanding between client and R&D advisor

Ultimately, an R&D tax relief claim is the responsibility of the claiming company, yet many R&D advisors still fail to emphasise this to clients when assisting with the preparation of the R&D claim.

It’s important for clients to understand their responsibilities and have a decent understanding of the R&D scheme to ensure they meet the criteria for R&D tax relief and maintain sufficient supporting evidence should HMRC raise an enquiry. 

Too often we have spoken with companies who have claimed R&D tax relief without having seen/approved the final copy of the R&D report filed with HMRC on their behalf.  This is a practice that we thought would be eradicated with the introduction of the Additional Information form, however, even now some companies are advising the Additional Information form has been filed on their behalf without their approval!

With the increased media coverage over the last year, clients are becoming more aware of their obligations, but a mutual understanding between client and R&D advisor is essential to ensure a robust claim is filed and minimise the risk of enquiry. At JS we collaborate with clients to help them develop their ‘R&D Tax relief strategy’ which includes client education sessions to help with identifying qualifying R&D activities, assistance in developing methodologies to collate evidence to support claims, should HMRC enquire, whilst providing full transparency in respect of the information being filed with HMRC on their behalf.

Education remains key to navigating through the many changes HMRC has implemented over the last 12 months with further changes announced for 1 April 2024, though the definition of R&D remains clearly defined:

• R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology.
• The activities that directly contribute to achieving this advance in science or technology through the resolution of scientific or technological uncertainty are R&D.
• Certain qualifying indirect activities related to the project are also R&D. Activities other than qualifying indirect activities which do not directly contribute to the resolution of the project’s scientific or technological uncertainty are not R&D.

Now more than ever it is important to have a mutual understanding between client and advisor not only to navigate the legislative changes but to ensure the R&D claim can withstand scrutiny should HMRC come knocking. 

If you’re not up to speed with the changes in legislation, your current R&D service isn’t working for you, or you need assistance with developing your R&D Tax Relief strategy, contact our specialist team at js.tax@jsllp.co.uk, who will help you navigate the changes.