According to the most recent CBI survey, less than 10% of companies are fully satisfied with the costs of making an R&D claim. When it comes to preparing an R&D tax relief claim, many companies immediately turn to their tax advisors. Small companies will turn to their accountants, large companies will have the Big 4 firms knocking at their door. In the old saying, no-one ever got fired for buying IBM so you may think that engaging one of the Big 4 accounting firms is a safe option to secure your R&D claim. In fact, in the current economic climate, there are advantages for the firms and executives that can demonstrate that they have the ability to operate cost-effectively and there is no better place to start cost-cutting than by driving down the cost of professional advice through the judicious use of in-house staff or boutique resource. Caught between inexpert advice at one extreme and huge fees at the other, preparing your claims in-house may prove a sensible middle ground.

As a small company, you may be tempted to let your accountant handle the claim. Before you proceed down this route, bear in mind they are extremely unlikely to have specialist expertise in this area, and will probably immediately ask you how much the claim is for rather than being able to help you assess or sense-check what that level of claim should be. Inexpert advice in this area can lead either to underclaiming or overclaiming resulting in an enquiry from HMRC.

If you are a large company, there will usually be a queue of professional advisors knocking at your door, each one eager to help you make an R&D claim. Each in turn will claim that they have the best team, unrivalled experience, industry-leading specialists, capacity, ability to deliver, relationships with HMRC and so on.

They will try to mpress you with glossy brochures, case studies and references. They may offer to scope your company's R&D for little if any cost. They will highlight the size of the benefit available based on either their scoping study or work they have performed for other companies in the same sector. And then will come the discussion around fees.

If you accept their proposal, in most cases they will assist you with obtaining your tax repayment  successfully and you will receive a call from them a few months asking if you would like the same arrangement for the next financial year. Most companies agree, their subsequent years are accepted by HMRC with little difficulty and the company retains their benefit on a yearly basis. However, after a few years of this type of arrangement, the amount spent on professional services fees reach extremely high levels and for companies that wish to cut costs, an easy area to make savings in.

There are typically 4 broad areas in an R&D claim.

1. Project Management

2. Technical expertise working with your R&D staff to help them understand what qualifies as R&D

3. Costing calculations

4. Reaching agreement with HMRC

Of all the above roles, in-house tax teams can usually adequately perform 3 and 4. Project management to ensure a claim is delivered efficiently and without undue interference with an R&D delivery schedule is important  and may be performed by internal resource in the same way as any other large project. Frequently, it is the idea of talking to engineers and scientists that raises doubts in the minds of some finance professionals and this is where boutique advice can add the most value.

Specialist boutique firms such as ourselves can provide you with an approach which gives you the most 'bang for your buck'. We will assist you with the guidance for your overall claim process as needed and then supplement it according to your requirements in specific areas. Working with your in-house staff and supplementing them in specialist areas as needed is far more cost-effective than going to the Big 4 but can offer the same level of experience and quality.

If you would like to carry out the whole process in-house, we are happy to provide training to your staff on how to do this in the most effective way.

Finally, there is also a difference for companies that are making R&D tax credit claims for the first time and those that are making repeat claims. While for a first-time claim, a company may have less confidence about whether their claim will be successful, and whether they will overclaim or underclaim, if a successful claim has been made and a precedent set with HMRC that you do perform R&D there is a strong argument that your risk levels for a claim are lower in subsequent years and that this can be performed in-house.