Posted on: 01/02/2018
Make sure you choose the right R&D tax relief advisory firm, for a robust, maximised claim with none of the hassle.
Now that the UK has cottoned onto the benefits of the Government’s R&D tax relief scheme, more and more providers are jumping onto the R&D bandwagon. In an unregulated market, how do you separate the bona fide R&D tax relief specialists from the others, out only to make a fast buck?
To help you, here are our 10 tips to choose the right R&D tax advisor.
1: Premises can tell you a lot about a firm
If an R&D tax specialist works from home, they might be a start-up with little or no track record. If they’re based in the back of beyond, that’s going to make meetings harder, and the service is more likely to be phone and internet-based. Also, if they don’t have a proper business address, are they going to be here today, gone tomorrow? A city centre location is expensive, but makes it easier for staff to reach customers and offer a face-to-face service. It’s also a good indication that a firm has invested in the business, and takes it seriously.
2: Do they have employees or use ‘associates’?
Providers who invest in their own staff are usually able to train them to a consistent level of knowledge and service. Associates tend to be much more variable in their knowledge and service – you might be lucky and get a good one, or you might not. Also, if associates are working for several companies, as some do, they’re not going to be as expert and focused as someone who devotes all their time and attention to one role. And, associates are often paid more for making larger claims. This can incentivise them to over-claim, leading to an HMRC enquiry – not what you want when HMRC is gunning for inaccurate claims!
3: Be careful who you contract with
You’d be surprised how many R&D tax ‘specialists’ have red flags against their names, and issues with their balance sheets. If they have a poor credit rating, this could be down to lack of funds, past indiscretions or a dodgy track record. Whatever the reason, do you really want them handling your company’s cash? And if HMRC were to come knocking on your door with questions in a couple of years’ time, how likely is it that your supplier will still be around to help you?
4: Who’s behind the business?
As with associates, if a Director is working with or for many different companies, this suggests that R&D isn’t their full – or even main – focus. As a result, they’re unlikely to be as knowledgeable as a team that is 100% focused on R&D tax relief alone. Also, if they’re spinning several plates at the same time, they may well have a conflict of interest. If they run a growth hub on behalf of another organisation, for example, are they truly independent?
5: If they are boasting a 100% success rate, all may not be as it seems…
Chances are, they’re either overstating the facts or have only done a very small number of claims. Why? Because having HMRC ask questions and make small adjustments is a natural part of the claim process, so saying that this has never happened simply doesn’t ring true. Even if the provider makes a habit of under-claiming to be conservative and ‘safe’ – which, incidentally, means you’re not getting all the money you’re entitled to – they’re still likely to be picked up by HMRC’s random sampling of claims at some stage.
6: They say they’re ‘technical’, but why is that important & are they telling the truth?
Broadly speaking, if your consultant has a deep understanding of your specific area of technology, they’re going to be more insightful and effective at identifying and documenting eligible activity, and therefore better at maximising your claim. What Jumpstart means by ‘technical’ is that our people are PhD, BSc and MSc qualified scientists and engineers across all industry sectors, complemented by comprehensive legislation and HMRC guideline training within the Jumpstart Academy. See how many others can say the same.
7: Make sure you know what you’re signing up for
Jumpstart’s contracts are designed to be clear and readable, as we want to be up-front about the expectations on both sides. Beware of more ambiguous contracts that carry a higher degree of risk. Look for auto renew clauses designed to trap you, and other tie-ins to the provider. What else is hidden in their T&Cs? Try to find out who will defend the claim in the event of an enquiry. Jumpstart takes full responsibility, whereas many others don’t.
8: Are they truly “specialists”?
Or are R&D claims just one of the many services they offer, hoping to make money from a posse of revenue streams? If R&D is just one element of their business, they’re unlikely to be as knowledgeable and specialist as a provider that’s 100% focused on R&D tax relief. This may mean that claims are less robust and that the provider may struggle to defend more complex enquiries by HMRC. Remember, they’re gunning for inaccurate or poorly put together claims.
9: Make sure you know what you’re buying
You might sign up to a rock bottom rate with a provider, only to discover that you’re expected to do most of the hard graft yourself when it comes to preparing and submitting the claim. If so, are you sufficiently comfortable with HMRC’s guidance to claim for exactly the right amount? And if you are, why are you then paying someone just to risk assess it? Do you really want them doing as little as possible and still get your hard-earned cash?
10: When you get down to the real nitty-gritty what will the claim feel like?
If you’re only prepared to pay a bargain basement price, you should also be expecting a bargain basement process. What you won’t get is ISO9001 accreditation, quality checks on deliverables, peer review, a dedicated Client Support department and presentable, knowledgeable, technical staff trained to a consistently high standard using Virtual Learning Environments. All of which you would enjoy with Jumpstart.
About the Author – Wendy Smith
Wendy, a BSc (Hons) graduate in Mathematics and Psychology, has over 15 years of experience working in the financial services industry, managing and developing relationships with lenders, professional services and business owners. Her focus is on building her network to maximise the opportunities for clients, keen to understand the challenges they face with the aim to find an answer. Wendy joined Jumpstart 2 years ago supporting a leading R&D tax relief specialist, guiding companies through the complexities of submitting claims to HMRC.
Based in South Cheshire, Wendy has access to good communication links to assist you wherever you are.