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Good, professional R&D tax advice can literally be worth its weight in gold. But not all R&D tax advisors are created equal - make sure you know what to look out for.
According to latest OECD statistics, around 2,600 companies in Ireland claimed R&D Tax Credits in 2019 alone, totalling over €650 million. Yep, R&D Tax Credits can be worth some serious money so getting a claim right first time - every time - is crucial.
Making a ‘DIY’ R&D tax claim is tempting but is also likely to be a waste of time as the complexity of the scheme means success will probably be elusive. That’s why UK companies tend to partner with professional R&D Tax Credit consultancies like Myriad.
However, not all advisors were created equal and it’s well worth doing your homework. Here’s what you need to know.
R&D Tax Credits are a tax incentive offered by Revenue so a good starting point is to understand an advisor’s tax experience and qualifications. Obviously tax is a complicated topic - are they chartered tax advisors? Revenue will expect R&D tax advisors to understand the tax legislation fully, so they need to be totally proficient. Also many areas of tax overlap, so if an advisor doesn’t understand the full “landscape” surrounding your company’s tax position you could well run into trouble later. Also, due to this overlap, it may well be that your R&D Tax Credit advisor needs to work alongside your accountant or in-house tax team. Do you feel confident in allowing them to do this? Don’t forget, R&D Tax Credits can affect other sources of funding too, like R&D grants. So a holistic approach to tax and a broader understanding of the funding landscape is very important.
R&D Tax Credits are about applying certain tax rules to your specific sector. This makes it well worth checking if the advisors are industry experts who can understand and communicate exactly what it is you need.
If your business is within a particularly narrow field, such as pharma or software, think about whether your tax advisor can fully understand and engage with its details and nuances. The language used in any R&D Tax Credit application could well involve a level of technical jargon, so it’s vital they not only understand what it means but can “translate” it enough to make sense to Revenue.
A broad tax knowledge is great, but they also need to understand the minutiae of making an R&D Tax Credit application so that it’s ultimately being dealt with effectively. How many similar claims have they completed before? This experience is vital in getting the claim right. For example, will your R&D Tax Credit advisor know what documentary evidence needs to be included, and how best to write your R&D technical report? If everything is not present and correct, you can easily run the risk of an investigation by Revenue (we’ll look at this in a second).
It’s likely you’ll discover that different R&D Tax Credit advisors provide very different services. Some firms will put a lot of time and effort into understanding your company, putting together your claim and submitting it to Revenue. This is a huge weight off your shoulders and makes the whole thing time (and money) well spent.
Unfortunately there are also many advisors who, for whatever reason, will try and get away with doing the bare minimum leaving a certain amount of work down to you. Generally you will need to compile the forms and documents yourself and all they do is check them. Although this can look attractive as it’s usually the cheaper option, it’s likely to require some serious time and effort that could be better spent elsewhere. Swotting up on all the R&D rules, working out what is and isn’t eligible, writing your report and submitting it will all be done by you, and you’re bound to wonder if you’re doing it correctly along the way.
Ask yourself how much is your time worth? The whole application could take a couple of weeks or even a month - do you have those hours available? This is where a complete service could well be the one for you.
Revenue is within its rights to investigate any R&D tax claims it wishes to - sometimes years after the relief has been paid. This may be because there’s a suspicion of inaccuracies or even fraud, or sometimes it’s simply a spot check. Either way, any Revenue investigation into your tax affairs can be scary, with potentially hefty penalties.
A good R&D tax consultancy (like us!) can literally be worth their weight in gold. They can help you understand any correspondence from Revenue and supply the correct documentation to move your claim forward. They can also put your mind at rest if you have any worries or concerns. In fact, just by using our services in the first place you’re drastically reducing the chances of Revenue enquiries anyway.
As a side note, check if the fee you’re quoted includes any support in the event of a Revenue enquiry. If it doesn’t, this could well be a substantial extra cost at what may already be a stressful time if an enquiry is raised.
This is another area where firms of R&D Tax Credit advisors can vary massively in their approach.
First of all, look at the initial charges. Are they set prices or are there extras in the form of “submission charges” or “administration costs”? Is there a requirement to enter into a long-term contract? If so, ask yourself why they’re offering this. Are they not confident that their service will satisfy you enough for you to choose to carry on using them in future? Also, are any charges negotiable and what happens if you don’t like your advisor and wish to look elsewhere once some of the work has been completed? Putting in the groundwork now can mean avoiding some very uncomfortable situations further down the line.
Myriad Associates consists of highly trained and experienced experts in all areas of R&D tax relief across Ireland and the rest of the UK. Whether your business is just starting out or you’re already set up and growing, our friendly, professional team will offer the holistic approach you need.
We’re based in Dublin but as everything is done remotely it doesn’t even matter where in Ireland you are - you don’t even need to leave your desk.
Call us today on +353 1 566 2001 or use our contact page and we’ll be pleased to call you back.