Failing to notify HMRC is a significant risk for businesses making R&D tax relief claims

More than three quarters (78%) of accountants have seen clients unable to make an R&D tax relief claim due to failure to notify HMRC under the new requirements for claim notification, according to a new survey conducted by innovation incentive experts, ForrestBrown.

This highlights that lack of awareness of the rule change process could be costing businesses carrying out genuine R&D.

More pressure and less time

Although accountants are already taking steps to adapt to the merged R&D tax relief scheme, many report increased operational burdens as a result of all the recent changes.

Eight in ten accountants (80%) say claims take longer to prepare than a year ago, with more than a third (35%) noting a ‘significant’ increase in time.

Over three quarters (77%) have had to invest in additional training to stay up to date with R&D tax relief changes, highlighting the mounting time and financial pressures firms are under to keep pace with shifting regulation.

Changing guidelines

Accountants are facing specific technical hurdles, as well as simultaneously adapting their processes to keep up with claims becoming more complex.

More than half (55%) say they struggle with writing project descriptions for the Additional Information Form and a further 64% say establishing who has the right to claim under the new guidelines on contracted out R&D is one of the most challenging aspects. More than half (57%) said that HMRC enquiries are one of the biggest pain points.

Kelly Oakley, Associate Director at ForrestBrown, said, “Unsurprisingly, changes made to the R&D tax relief incentive are creating challenge for accountants and their clients alike. More work is needed to put together a robust claim that meets HMRC requirements, and the new rules create complexity.

“This is prompting some accountants to review how they provide R&D tax advice which for some means choosing to partner with a specialist to supplement their own expertise.”