How Many Technical Reports Do Companies Need For An R&D Claim?
Understanding the principles and demands of a successful R&D technical report - and how many to include - can be the key to success. Find out more.
Claiming is complex
You know your clients, and how important it is that they get the innovation funding they need to thrive. If the technical report that supplements their R&D Tax Credits application is even slightly inaccurate, their chances of successfully securing R&D tax relief could be in jeopardy.
The whole point behind the report is to persuade HMRC of both the project’s and the company’s eligibility. It should describe in detail the technical challenges that were addressed, how they were addressed, and how this meets HMRC’s stringent criteria. It must be completed in a certain prescribed way, which can be somewhat alien even to the most competent and experienced of business accountants.
Before you continue on, we strongly recommend reading our recent blog: How To Prepare A Technical Report For An R&D Tax Credits Claim for more background about the report, as well as How Myriad Associates Can Work With Both Clients And Their Accountants Remotely.
Do your homework
It’s important to have a fair grasp on R&D Tax Credits from the outset - see our R&D Tax Credits page in addition to the Gov website. It looks closely at the context of the scheme, who is eligible, what it covers and how your clients can avoid the pitfalls.
Claiming is not a straight-forward process, plus it can be time consuming and complex. So use the Tax Cloud portal for accountants to guide you through the claims process. It’s been honed by the R&D funding experts at Myriad Associates which means you can make a watertight claim on behalf of your clients quickly and simply. More on this later.
If your client’s report describes ten or fewer R&D projects
If your client is claiming tax relief on between one and three projects, then the report needs to contain details of each project individually. For four or more projects, detailed descriptions need to be provided on a maximum of ten but minimum of three projects. All the projects between them must cover at least 50% of the company’s total eligible R&D costs.
And more than ten R&D projects?
If your client is looking to claim for more than ten R&D projects accounting for over 50% of their qualifying costs, they should email for tailored advice: [email protected].
There’s an HMRC online tool - can’t my clients just use that?
Of course - but we certainly don’t recommend it. This is particularly the case if they have never made a claim before, or at least not for some time. The Tax Cloud portal is a far better route to take.
The fact is that there are many grey areas in making an R&D Tax Credits claim, and things aren’t always as obvious as they seem. There are many opportunities for errors and inaccuracies that are likely to cost your client (and your reputation) dearly.
Although the government has provided companies a method of applying, it’s really rather basic - there’s no guidance or feedback along the way.
Why use the Tax Cloud portal?
When using the Tax Cloud, companies are able to submit multiple technical reports as they go along. This functionality, alongside the guidance and support of our specialist R&D advisors, makes Tax Cloud a valuable, unique way of securing an R&D tax relief claim whilst remaining fully compliant.
The Tax Cloud portal deals only with R&D Tax Credit claims, making it a highly tuned, efficient online solution. Our team are also on hand throughout, answering questions and helping to optimise claims for maximum relief. It’s a seamless, hassle-free way of offering your clients a more complete tax relief service.
There are other benefits for accountants too
Using the Tax Cloud portal doesn’t just have benefits for your clients, but for your accountancy firm too.
We will train you at no extra cost in all aspects of the Tax Cloud - how it works, the principles behind it, and all the functionality. And of course, we’re available at any point for questions and comments.
It integrates with Xero
If your firm or your clients use Xero, the Tax Cloud portal integrates with it for even easier claims preparation.
The chance to grow your practice
This is the opportunity to offer a more comprehensive service to your clients by helping them access additional funding. This funding is likely to be invaluable, particularly amidst COVID-19 economic uncertainty.
Technical reports should be kept simple
Another thing we wanted to flag up is the fact that completing a technical report that focusses on a few projects well is far better than squeezing in lots of projects in a sketchy fashion. Clients should also be encouraged to keep their writing concise, around two to four pages of A4. Everything should refer back to HMRC’s criteria, with nothing superfluous or that doesn’t focus enough on technical challenges. After all, an HMRC officer will need to work their way through the report and try to understand it - if there’s too much to wade through it could damage the chances of success.
Again, it’s technical. Not managerial
Technical reports are just that - technical. They shouldn’t include managerial or creative challenges; it’s about laying bare the facts of the project. Reports should also be explicit in how difficult and technically challenging the company’s R&D projects were. It’s on this basis that R&D Tax Credits are awarded.
The Tax Cloud can mean the difference between a claim’s success and failure
Tax Cloud UK was designed and developed by Myriad Associates, a boutique, highly specialised R&D funding consultancy with offices in the UK and Ireland. When both clients and accountants use the Tax Cloud portal, all technical reports are verified fully before submission for total peace of mind. It’s outstanding value too, as fees are only paid if and when clients are successful - there’s nothing to lose.
Log on to the free Tax Cloud portal for accountants now or call our team on 0207 360 4437. We work remotely so if you’d prefer you can send us a message and we’ll get back to you by phone or video call.