Making R&D claims – Are you providing detailed work evidence?

It may be clear to you that you are undertaking innovative and qualifying activities for R&D purposes, however, it needs to be presented to HMRC in a clear and understandable way to evidence that it meets the criteria for relief. Here’s why you should be asked for detailed evidence of the work before making a claim:

• It won’t be news to many of you that there is a much greater level of scrutiny on R&D claims at present by HMRC, and they are in fact issuing letters requesting additional information from claimants on a more blanket approach.
• HMRC’s auditors are rumored to not be signing off their accounts, since they have knowledge that HMRC’s figures contain fraudulent R&D claims that have been wrongly processed. This will only result in a greater level of checks for all claimants, even those that are legitimate.

With many years of experience in this area, we have bui2lt a very good understanding of what HMRC expects to see with regard to the levels of detail, and how best to ensure the evidencue is of high quality. We also now have Gina Gardner, our Corporate Tax Manager, who specialises in this area and has experience across a broad range of sectors and is very well rehearsed in capturing the evidence required.

The quality of claims is not something we compromise on and although it may be additional work, it’s a far cry from the potential work required in the case of a full enquiry. These can be very drawn out and stressful experiences, and therefore, we have your company’s reputation at the heart of the work we undertake, and we will do our utmost to minimise the chances of this arising. Our clients have also said it’s a rewarding piece of work to undertake given the benefits received and the ability to reinvest the funds into their ongoing projects.

Ultimately, as a Director, you will sign off your company tax return and R&D report, and thus, you must be happy that the contents are complete and accurate. R&D claims are prepared based on a number of estimates, and hence, we need to substantiate this within the report. This is why we will ask for additional information where it’s deemed necessary, whilst also working to minimise the disruption to your business as much as possible.

We provide as much information as possible from the outset to minimise any follow-up questions or risk of enquiry. This is also an important point since staff can leave and take the knowledge of a specific period of work with them. Trying to work retrospectively can still be challenging when those staff are still in post, let alone when they have moved on.

Our experts will work with your technical staff directly, either by writing up reports ready for your review and commentary or by providing specific review points from your draft write-ups if that’s the preferred method of completion. Whichever process works best, we will tailor it around you.

To summarise:

• Remember, as a Director, you ultimately need to be happy that the report substantiates the claim being made, and that the claim is accurate and genuine.
• HMRC is undertaking much greater checks on claims and additional information may be required.
• We cannot compromise on quality as it’s both your company and our firm’s reputation with HMRC at risk. Be very wary of other providers suggesting they can make a claim with limited information as you are ultimately responsible for the submission, not the firm you are engaged with.
• We will work with you in a way that suits you best in order to capture high-quality supporting evidence, whilst maximising the relief and minimising any perceived burden of completing it.

If you have any queries regarding an existing claim or would like to discuss our services further, please don’t hesitate to contact Gina Gardner at gina.gardner@ballardsllp.com