R&D tax relief client success stories

In a decentralised business, with multiple sites or business units, the decision-making process can result in different R&D advisors, different approaches, and different methodologies.

The risk

There is a significant amount of risk to a business that doesn’t have a consistent methodology that ensures compliance and alignment to the HMRC schemes. There is security in having a single approach and single advisor to deal with HMRC in a cohesive way.

The opportunity

A unified approach can lead to a material uplift in the number of R&D projects that are identified and the related qualifying expenditure. A more holistic view means that projects that touch multiple sites or units are identified and brought into scope.

Source Advisors benefit

• We work with each site or unit to get buy in from the lead and their teams, to address any concerns about a head office “diktat”.
• We provide our most relevant technical expert to partner up with each site to meet their specific needs.
• We take a longer-term approach that achieves the end goal of a single methodology across all the business units.

Client experience

With a manufacturing client, our 3-year relationship helped us create a single methodology, a slicker process, and the delivery of robust, technically rich R&D claims. As the technical relationships and trust developed, we ensured that the process met the needs of both the central tax team and the business units, without diluting either priority.

Businesses can face resistance when communicating their processes around R&D and intellectual property to the Board or senior leadership. There can be an understandable mindset that recognises tangible value but has a low appreciation of intangible value.

The risk

Without a champion and executive level buy in, there is a risk that IP and R&D will leak from the business without being commercialised.

The opportunity

Articulating and communicating the strategic IP vision, alongside the practical impact, allows business to better identify the richest areas of R&D in the business. It keeps innovation in the business and ensures it is acted on.

Source Advisors benefit

• IP competitor analysis and benchmarking quantify the possible risks, and greater IP opportunities, that could be realised by a business.
• We help promote the adoption of invention harvesting within a business by working with the existing culture of the business.
• We build a roadmap to show the way to creating culture of innovation capable of commercialising the opportunities that arise throughout the business.
• We give Boards and senior leadership the understanding and confidence to champion innovation in their businesses.

Client experience

We worked with world leading construction business to present a full competitor analysis and benchmarking review to the Board. This showed a 5-year roadmap towards market leadership through innovation. We then translated that strategy into an operational plan, allowing key team members to bring that innovation culture to life.

Businesses that use non-specialist advisors to compile their R&D tax relief claims can end up with a narrow and routine process for identifying R&D projects and accompanying qualifying expenditure.

The risk

The scope of the R&D claim can be limited when advisors default to a transactional, non-technical approach.

The opportunity

Working across the business and at depth often leads to the identification of new R&D projects. Regardless of the resulting R&D claim, there is significant value in understanding the widest viewpoint of R&D activity and how that may develop in future years.

Source Advisors benefit

• Our team is made up of scientists, technologists, and engineers, so we can speak with the technical leads on a peer-to-peer level.
• Our combination of a top-down and bottom-up approach is the only way to achieve a holistic view of a business’s innovation activity.

Client experience

Our FMCG client had previously worked with a Big 4 advisor for R&D tax on a fixed fee basis, and in discussions with us, felt that the scope had been limited and had become a transactional approach to RDEC. For us, R&D tax is not a tick box. The client appreciated our fresh approach, which resulted in a marked improvement in both the quality and output of the R&D claim process.

The central tax and finance teams can struggle to get the information required from different profit centres to evidence a successful R&D claim.

The risk

The need for technical input is vital in the process and must take priority. HMRC continue to elevate the role of the competent professional, who will be critical in any compliance check.

The opportunity

R&D tax relief, whilst a tax benefit, is predominantly an investment mechanism for UK government and is designed to encourage more R&D in the UK. If businesses engage fully, with technical expertise fully aligned to the process, then the opportunity for this investment is optimised.

Source Advisors benefit

• We reduce the focus on the numbers, schedule focused quick calls rather than assuming that more in-depth discussions are required.
• We agree next steps collaboratively and directly with the business.
• We articulate the value of the central tax benefit, making it relevant to the wider business who may not routinely see the direct benefit of their input to an R&D claim.

Client experience

We have supported our clients with internal communication to celebrate the R&D activity that is going on in their business. This allows the whole business to factor in the R&D tax relief benefit in investment business cases.

Often, relevant information is collected centrally by tax via written documents and spreadsheets. This is a huge administrative burden on a team that often creaks during the spiky seasonality of tax compliance work.

Risk

When data collection is considered time consuming and low priority, then R&D tax relief deadlines aren’t met, and claims aren’t successful.

The opportunity

Creating processes that are slick, auditable, and in real time can streamline data collection and optimise claims.

Source Advisors benefit

• We install processes that align to a client’s internal schedule and enables real time collection.
• Our primary function is to get out into our clients in person (where possible) and meet their teams, exchanging data via our secure portal as we go. This gives an important audit trail online, a repository that’s secure and frees up time across the organisation.
• By leading with technical people at our side, the conversations can be faster, more focussed and rely less on the Competent Professional.

Client experience

On every occasion where a client has taken the decision to work with us, there has been a positive outcome for them both in terms of the scale of R&D identified and how the process has run from a staff engagement and project management perspective.