I’m on my way, from outsourcing to in-housing today

Here at WhisperClaims, we talk to a lot of people with some kind of interest in R&D tax relief. We talk to accountants and consultants, people who prepare claims day-in and day-out, and people who’ve never prepared a claim in their life. 

From all these conversations, we see patterns in the ways people work and think. One of the most consistent patterns we see is the worry felt by accountants who have always outsourced their R&D claim. They’re worried that their clients are being taken advantage of, worried that their clients are overpaying even where the outsourced service is good, and really, really worried about how they can maintain the quality of service that their clients expect if they bring the work in-house.

The good news here is that, with a little bit of work and the right systems in place, it is absolutely feasible to bring your R&D tax relief services in-house without any drop in quality for your clients.

Education, education, education

The first step when developing an R&D tax claim preparation service is to make sure that you understand HMRC’s guidance and criteria for what constitutes eligibility. We’ve written before about eligible expenditure, tax credit rates and the basics of eligibility, and of course we have our training courses and webinars, but it’s important that anyone offering advice on R&D tax relief has spent some time at the single source of truth, also known as the Corporate Intangibles Research and Development manual (CIRD). As a minimum, you need to be intimately familiar with CIRD81900 and CIRD81300, and it’s also very important to understand the categories of qualifying expenditure.

Once you’ve made sure that you have a robust understanding of HMRC’s guidance, it’s key to then pass on this knowledge to your clients. We’re written about this before, but in short you do need to make sure your client has at least a passing understanding of the relevant parts of the guidance. In the end they’re the ones who have the detailed knowledge of their projects, and are best placed to assess whether they are eligible, with your guidance.

Consistency is key

Every robust and well-prepared R&D tax relief claim starts with a consistent process – you need to be absolutely sure that you’re asking all of the right questions every single time, and that the quality of your output doesn’t drop over time, or depend on which staff member is handling the claim.  

There’s no right or wrong way to prepare a claim as long as you make sure you’re covering all of the bases, but our experience suggest that your process should include the following:

1. A structured conversation with your client about the projects they carried out during the claim period;
2. An assessment of each of these against the criteria;
3. A cost capture phase, where you work with your client to identify the costs of each of the eligible projects;
4. Production of a technical narrative and costs breakdown to support the claim;
5. Client review of the narrative and costs (including sign-off);
6. Submission of the claim to HMRC.

Make sure the process fits you

Having said all of that about process and consistency, it’s also incredibly important to make sure your processes fit your company, your existing processes, and the way you like to work with your clients. While this may sound simple, you have a lot of decisions to be made – face to face meetings, or over the phone? Manual report preparation, or R&D tax claim software? If you chose software, collaborating with your client for data capture, or doing this yourself? Including R&D as part of regular meetings, or having a separate meeting to work through it?

Choosing to use software to assist with claim preparation can make this planning stage simpler – the WhisperClaims app doesn’t just automate your report production, it also gives you an ‘out-of-the-box’ process, with a consistent set of questions that can be used for all clients. It’s also designed so that it’s as easy to use in isolation from your client as it is to invite them on to the platform to collaborate with you in data capture and review. 

Remember where your value lies

Finally, throughout all of the planning and implementation of your R&D tax relief service, you must focus on where the value lies. We often speak to accountants who worry that they need to produce a glossy, 20-30 page report for HMRC, just like the consultants that their clients have been using. Remember, the report is just the output of the process, not the goal. The value of this service is in the advice and help you, as their trusted advisor, can give to your client, and in the robustness of the claim that you prepare, not the length of the technical narrative!