The Ingredients for a Robust R&D Claim

Cover Image for The Ingredients for a Robust R&D Claim

| Simon Briton

The shake-up of the R&D tax market has seen several advisers leave the market and others seemingly unable to progress claims, which leaves a lot of accountants with a decision to make. If your approach has been to rely on an external firm but that firm is no longer around, or you simply don’t trust that they are doing the job properly, bringing claims in-house can be an attractive option.

If you do decide to bring your R&D claims in-house, you will want to be well-prepared before submitting claims on behalf of your clients. When it comes to making an R&D claim, there are several ingredients that go into making sure a claim is robust and the questions below often help gather this information from clients.

Project:

  • How can you demonstrate what the start and end dates were for this project?
  • What structure did the project take?
  • How did you keep track of things?
  • How will you know when to stop work on this project?

Aim:

  • How can you show this was a purposeful development?
  • What decision-making process led to time being dedicated to this task?
  • What evidence have you got to show when that decision was made?

Advance:

  • How were your capabilities restricted before you started the project?
  • How did that affect your product/process?
  • How would overcoming this give you an edge over your competitors?

Science/Technology:

  • This can’t just be doubts about the best way to do something.
  • How can you show there were doubts about the feasibility of the project?
  • Where is the line between commercial and scientific feasibility on this project?

Uncertainty:

  • How can you show there is a line between:
    (a) customising, optimising, maintaining, debugging, etc; and
    (b) changes that affect the underlying science/tech?
  • What was the missing knowledge/capability that left you with feasibility doubts?

Activity:

  • How can you show who did what and when?
  • How did those activities contribute to tackling the uncertainty?
  • What would have been the standard approach?
  • Why wouldn’t that work here?

Obviousness:

  • What would be ‘readily ascertainable’ in this context?
  • How can you show this was an issue across your industry and not just for your company?
  • How can we split activities between things that would be obvious to an expert and things that have no beaten path?

By ensuring that all of those ingredients have been accounted for and questions have been answered you will significantly decrease the likelihood of your claim being denied.

If you would like more information about this topic, please visit https://courses.cpdstore.co.uk/courses/bringing-r-d-tax-in-house-may-23.

You can contact Simon Briton through his website or via email: [email protected].

The contents of this article are meant as a guide only and are not a substitute for professional advice. The authors accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. 

Image of Simon Briton

About the Author

Over 20 years’ experience working with innovative businesses and supporting law firms and accountancy firms with commercially focussed tax advice. Previous clients: Sage, Vodafone, Yahoo, BT. 20 years of making R&D claims and handling difficult enquiries for accountants that have made their own claims. Advisers typically handle very few HMRC enquiries and so, by handling them for a wide range of accountants, Simon has amassed a great deal of expertise in this area.

YOU MAY ALSO LIKE

Cover Image for The ATED Legislation - What Does it Mean for High Value UK Residential Property

The ATED Legislation - What Does it Mean for High Value UK Residential Property

 

ATED is an annual tax payable mainly by companies that own High Value UK residential prope...

Cover Image for Pensions Auto Enrolment: Looking at Ireland and the UK

Pensions Auto Enrolment: Looking at Ireland and the UK

 

As countries grapple with ageing populations and the financial sustainability of state pen...

Cover Image for Impact of the Minimum Wage Rise and Compliance

Impact of the Minimum Wage Rise and Compliance

 

The recent rise in the minimum wage poses a significant impact to businesses and their emp...