Ever since HMRC increased its compliance activities in relation to claims for R&D tax relief, many companies have been shocked to find that their claims are actually invalid, and the advisor they used might not have been entirely honest with them.

It is very difficult to assess an advisor’s capabilities, though, as even helpful articles such as “How to select a good R&D advisor” tend to be written as marketing material  and so usually highlight the particular strengths of the advisor writing it.

The best tool we have found for ascertaining whether an advisor is reputable is social media but keep in mind:

• Dishonest advisors have no problem lying to clients and HMRC, so they won’t have any issues lying in their social media content.
• A company’s own employees or random people’s interactions with a post should be taken with a pinch of salt as these are likely to be biased and potentially paid for.
• Unconnected advisors in the same field are much more likely to be honest and so their comments/feedback should hold more weight.
• A reputable advisor may not post much about their own company but may be active in supporting other’s posts with comments, advice and insight.
• Mention of “award winning” could be misleading as advisors will often pay for awards in an attempt to boost their credibility.

With HMRC increasingly asking questions during compliance checks about what research the claimant undertook in order to satisfy themselves that the advisor they used was reputable, doing your homework before engaging a tax advisor is becoming more and more essential, rather than just relying on what the advisor told you about themselves.

If you have any questions on this blog or anything R&D related, please contact us at [email protected].

Posted: 27 Jun 2024