Do I need an accountant for an R&D claim?

No, you do not legally need an accountant to make an R&D claim. The claim is made by the company in its Company Tax Return, and a director can prepare and submit it. In practice, though, a claim has two halves: the tax computation and return, which an accountant handles every year, and the technical case and cost evidence, which is specialist work. Most companies get the best result by having both done well, whether by one firm or by two working together.

Who can prepare an R&D claim

There are three realistic options.

• The company itself. A director or finance lead writes the project descriptions, apportions the costs and completes the forms.
• The company's accountant. The practice that prepares your accounts and tax return builds the claim as part of that work.
• A specialist R&D tax adviser. A firm that only does R&D claims prepares the technical and cost side, usually in step with your accountant.

None of these is mandatory, and none is automatically the best. The right choice depends on how complex the work is, how much time you have and how comfortable you are with the technical test.

Claim size does not decide it either. What matters is whether the person doing the work understands the Government's definition of R&D and can support the figures. A tax qualification on its own does not answer that, and neither does technical knowledge on its own.

What a claim actually involves

Our page on how to claim sets out the sequence. In short:

1. Confirm the accounting period and which scheme applies.
2. Check whether a claim notification is needed. First-time claimants must notify HMRC within six months of the period's end.
3. Identify the projects and write a technical narrative for each.
4. Work out the qualifying costs, including time apportionment for staff.
5. Submit the additional information form, which must go in before or with the return.
6. Include the claim in the Company Tax Return, within two years of the end of the period of account.

Steps 1, 2, 5 and 6 are mostly process. Steps 3 and 4 are where claims succeed or fail, because HMRC looks for specific evidence of scientific or technological uncertainty and a defensible cost base.

What each option brings

Doing it yourself costs no fee and draws on people who know the work best. The risk is in the technical judgement. It is easy to describe routine development as R&D, or to leave out qualifying work because it feels ordinary to the team. Rounded time estimates and project descriptions that could apply to any company are the patterns that attract questions.

Your accountant knows your accounts, your tax position and your payroll. That helps with the cost side and with timing, and many practices are comfortable preparing straightforward claims. The limit is usually technical depth and capacity. R&D claims are a small part of most practices' year, and writing a good technical narrative takes time.

A specialist adviser brings experience of what HMRC accepts, how projects are tested against the Government's guidelines, and how claims are evidenced if they are checked. We do not prepare accounts, so our role is narrower than an accountant's. The trade-off is a fee, and the need to coordinate with whoever files your return.

The accountant's role in the return

Whoever prepares the claim, the numbers have to land correctly in the Company Tax Return. The figures in the return, the additional information form and the technical report must agree, and the claim has to sit properly in the tax computation. Differences between them are an easy trigger for HMRC questions.

That is why we normally work with the company's accountant rather than around them. In many cases the practice files the return and we supply the R&D computations, the technical report and the additional information form. Our accountants page explains the referral and white-label models, and who is named as agent in each.

Questions to ask any adviser

If you decide to use an outside adviser, whether a specialist or your own accountant, ask a few plain questions before you agree.

• Who will write the technical narrative, and will it be specific to our projects?
• Who reviews and signs off the claim, and what are their qualifications?
• What happens if HMRC opens an enquiry, and is that support included in the fee?
• Will you be named as agent on the HMRC forms?
• Do you receive or pay any referral fee, and will it be disclosed to us?

A good adviser will answer these directly. If the answers are vague, treat that as information.

Naming agents

Whichever route you choose, every agent involved must be named to HMRC on the notification and on the additional information form. That covers anyone who advised on the claim, analysed the costs, wrote the technical report or filed the return. HMRC does not regulate R&D agents, but it can refuse to deal with them, suspend their online access and, in serious cases, prosecute. Check that your adviser is transparent about who is doing what, and about any referral fee.

How to decide

Ask yourself three questions.

• Can we evidence the uncertainty? If your team can explain clearly what could not be known in advance and how they tested it, a self-prepared narrative is feasible.
• Is the claim large or unusual? Groups, subcontracted work, overseas costs or grant funding add rules that are easy to get wrong. These are good reasons to involve a specialist. See our R&D claims service.
• Who will defend it? If HMRC opens an enquiry, someone needs to respond in detail. Decide in advance whether that is you, your accountant or a specialist.

Talk to us

If you are not sure which route suits you, book a call. Tell us about your projects and who currently looks after your tax, and we will say honestly whether you need us, or whether your accountant or your own team can do it. Every claim we prepare is reviewed and signed off by a Chartered Tax Adviser.

This article is general information, not advice. Please speak to us before acting.