If you are a business performing Research and Development (R&D) in your organisation, there’s a good chance you’ve heard about the R&D Tax Credit Schemes provided by HMRC. These schemes gives small and large businesses the opportunity to claim back certain R&D expenses for tax purposes, which can be a brilliant asset to any company.
When submitting a claim for a R&D project, there are several different bits of information and expertise you will need to provide, in order to qualify for the R&D tax credit schemes. If you want to find out more about submitting an R&D Tax Claim, click here.
One of the phrases that is commonly used by HMRC, is the title of ‘Competent Professional’. Below we have provided some insight into who a Competent Professional is and what they’re expected to provide for HMRC.
When submitting a claim, there are certain details HMRC will be expecting. One of their requirements is for you to portray your various expenses that qualify under the tax schemes, but alongside this, HMRC wants this evidence to be presented by people who have professional competence and expertise in their field.
Whatever your company produces, when you’re submitting a claim, it’s vital that all of your recorded R&D expenditure is run through competent people in your business who have a record of outstanding performance and have been in the industry for a number of years. They must have also acquired the relevant experience and skills in higher education or through an apprenticeship that can contribute to the competency framework of the company.
HMRC are looking for an in-house professional who has enough technical knowledge in the same field as your R&D claim, and whose primary tasks give them the experience to determine whether there is a need in the business for R&D in the first place. Simply put, HMRC wants to know your money is being spent effectively and efficiently by qualified, competent personnel
For many businesses, it’s likely they already have an in-house specialist who is running operations in some way and can also be considered a ‘Competent Professional’. As long as they have a good and lengthy track record of experience both educationally and technically in the workplace, they should qualify.
Here are the guidelines provided by HMRC stating that a ‘Competent Professional‘ should:
According to the guidelines, a competent professional needs to be an individual who knows the ins and outs of the company development and the kind of work that is needed to move projects forward. HMRC will want you to prove that your competent manager/professional has faced scientific or technological uncertainties which could only be solved with R&D, rather than publicly available information or any other pre-existing knowledge within the company.
In simpler terms, as long as the competent professional has performed all possible actions but cannot move forward and solve the problem, it’s likely that no one else could either. This is when you would need to conduct R&D for your project.|
When submitting a claim for R&D tax credits, it’s good practice to also include information on your competent professional in your report. As your report has to go through a series of checks with HMRC, any information that is lacking could extend the process and delay your tax relief. Providing evidence of experience and expertise regarding your competent professionals will add weight to your technical narrative and give your evidence more weight with HMRC.
It’s also important that you specify in your technical narrative the problems, technical uncertainties and decisions your competent professional faced regarding R&D projects. In the report, the competent professional will need to specify which R&D projects and work should be included within the tax claim. Though it will most likely be a collaborative process within the company to gather eligible expenditure, it’s wise that the competent professional leads the process.
|The process of calculating eligible expenditure and creating the technical narrative around your R&D projects can be quite stressful and time-consuming. Our process at TBAT has been created to help simplify R&D tax claims for UK businesses.
Our goal is to:
By using a company like TBAT, you’ll have a partner in creating your claim and ensuring it succeeds. Our team of experienced R&D consultants will build and approve your financial report and technical narrative, and will collaborate with your accountant to help your CT600 form to be completed correctly – regardless of how complex the claim’s structure – we’ve seen them all.
TBAT is also perfectly suited to communicate with your competent professionals knowledgeably. Our ability to “talk shop”, to discuss the technical subjects, comes from our unique R&D tax team. Our team have all come from technical backgrounds either within research or industry. They love technology and communicate with your competent professionals effectively and quickly to maximise the claim’s value and minimise their time away from R&D.
Particularly for bigger projects, calculating expenditure for R&D activities can become more complicated if you are not experienced. We want to ensure that your claim succeeds and falls into the correct categories with HMRC. TBAT can help you identify all of the R&D that qualifies for tax relief, ensuring you can claim back the maximum for your R&D projects. Contact us today to start the process with TBAT.
The HMRC PAYE Cap is now live for any R&D Tax Credits claims via the SME Scheme, for financial years starting after 1st April 2021.
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