As an accountant, you know the importance of getting things right the first time for your clients.
When it comes to R&D tax relief, relying on a client’s memory months down the line is unlikely to help you make a successful claim.
HMRC requires strong evidence, and the most effective way to ensure it’s available is by documenting R&D activities as they happen.
Why you need to enforce detailed record-keeping
R&D tax claims depend on proving genuine technological or scientific challenges.
In December 2023, HMRC revealed plans to boost their compliance checks on claims to approximately 20 per cent. As a result, the likelihood of your client’s claim being reviewed has risen considerably.
If your client is investigated, having well-organised records can be the difference between a smooth approval and a drawn-out process.
Putting everything together later is risky, as important details will likely get lost or forgotten, weakening the claim.
What details does your client need to record?
To ensure your client is prepared to provide evidence supporting their R&D claims, ask them to do the following:
- Appoint a competent professional – Designate a technical expert to oversee R&D documentation.
- Store evidence securely – Keep technical drawings, test results, and prototypes accessible and organised.
- Conduct regular reviews – Periodically review records to ensure they align with R&D tax criteria and allow time to complete or retrieve any missing documentation.
- Keep track of:
- Project goals and technological uncertainties
- How their work goes beyond standard practice
- Design iterations, test results, and problem-solving discussions
- Evidence that distinguishes R&D from routine development
- Details of costs associated with the R&D project
By encouraging your clients to keep clear and detailed records from day one, you help protect their claims and avoid unnecessary stress.
A proactive approach reduces compliance risks and ensures they get the full tax relief they’re entitled to.
If you need support preparing R&D tax claims for your clients, contact our R&D tax consultants to discuss your requirements.
