Alex Black is the Head of Innovative Accounts at Ad Valorem Group.
Each day as an R&D specialist varies greatly as the eligibility for the R&D scheme is wide reaching and therefore the client base is diverse. However at their core they are all innovative and have a common approach in challenging the “norm”.
HMRC has criteria for what qualifies as R&D – a company must be seeking a technological or scientific advancement and overcome uncertainties. There is the pure R&D where a new product is created, then there is the R&D that takes a product or process and advances it over the base line. A good example is the iPhone - mobile phones and MP3 devices already existed but Apple integrated them into a smartphone in a significant advance. Engineering firms often find better ways to do things, and IT companies often integrate several pieces of software to allow functionality that was not previously possible.
Unsurprisingly, software is the most common R&D claim area, followed by engineering. But right now, there are quite a few eco-friendly R&D claims – most industries are seeing a drive for all processes, logistics and packaging to be eco-friendly or 100% recyclable.
R&D claim work involves understanding what the client has done to determine whether there is a case for a claim. Projects that succeed after a number of failures are more indicative of R&D so clients need to be encouraged to think about the failures they have had, how the end result is better than the baseline, and the hurdles they have had to overcome. Alex uses this information to produce a technical report to show HMRC that eligibility criteria have been met, and then provides a detailed calculation for the costs being claimed.
Some ACCA practices may be wary of doing R&D claim work but that can leave clients exposed to rogue R&D advisers. If you do not want to do R&D claim work yourself then make sure your clients use qualified professionals for an R&D claim. Ad Valorem provides R&D services to its own clients and also clients of other practices on a non-competing basis.