Reviews
How to vet a UK accountant for R&D tax credits after HMRC's compliance crackdown
How R&D tax credits work after HMRC's compliance crackdown, the evidence inspectors expect and the questions to ask before appointing a UK accountant.
| Decision case | Main comparison | What the accountant should establish |
|---|---|---|
| Is the work eligible? | Statutory definition and contemporaneous evidence | The uncertainty and the records supporting the technical account |
| Which route applies? | Merged credit or enhanced support for an R&D-intensive SME | Period, qualifying expenditure and the company's position |
| Is the claim ready to file? | Additional information form and advance notification | Named senior officer for the form and notification timing |
| Who will do the work? | Technical review, credentials and claim experience | Named reviewer, responsibilities and enquiry contact |
| What happens if HMRC enquires? | Evidence, response process and fee terms | A clear plan for deadlines, replies and a denied claim |
Start with eligibility
Begin by asking the firm to explain why the work meets the statutory R&D definition and what contemporaneous records support that view. A convincing pitch is not enough: the technical uncertainty and evidence trail should be tested before filing through a structured quality check, not left until HMRC raises concerns.
Ask how the firm will examine the work and what information it needs from your team. Before appointing anyone, use the accountant selection checklist to compare the proposed checks, responsibilities and service arrangements, rather than relying on a promise that a claim will be successful.
What HMRC's compliance push changed
HMRC has said it is acting on error and fraud in R&D claims, and the "crackdown" is a set of rule changes plus tougher checks. Three changes matter when you vet an accountant.
First, since 8 August 2023, claims need a digital additional information form. Second, a company that has not claimed R&D relief in the previous three years must notify HMRC of its intention to claim within six months of the end of the period. Third, HMRC opens more enquiries into claims and the evidence behind them.
The merged scheme from 1 April 2024, legislated in the Finance Act 2024, also changed the routes. A good accountant should explain how their process now handles each change.
Before 1 April 2024 the relief sat in Part 13 of the Corporation Tax Act 2009; the merged scheme comes from the Finance Act 2024, so check the current text on legislation.gov.uk. The statutory definition of R&D is in section 1138 of the Corporation Tax Act 2010, read with the government's guidelines on the meaning of R&D for tax purposes.
Compare the routes without relying on a sales pitch
Treat a scheme recommendation as conditional on the accounting period and the company's circumstances.
For periods beginning on or after 1 April 2024, the merged route provides a 20 per cent above-the-line credit; loss-making companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5 per cent if they meet the definition for R&D intensity, and the intensity threshold is reduced from 40 per cent to 30 per cent.
Merged scheme vs intensive SME
Merged scheme
- Availability
- Most claimants
- Credit type
- Above-the-line
- Headline rate
- 20 per cent
- Eligibility test
- Standard rules
R&D-intensive SME
- Availability
- Loss-making SMEs
- Credit type
- Enhanced rate
- Headline rate
- More generous
- Eligibility test
- R&D spend proportion
For the intensive route, the deduction is 186 per cent and a payable credit can be 14.5 per cent for a qualifying loss-making company. The 20 per cent merged credit is not a 20 per cent cash benefit, because its value depends on the corporation tax rate paid. Check the accountant's calculations against the GOV.UK guidance on the merged scheme and R&D-intensive support.
Inspect the records and the technical account
A capable adviser should be able to identify the technical uncertainty and explain why a competent professional could not resolve it using existing knowledge. Ask how the technical narrative will be tested against project evidence, and whether the reviewer will distinguish eligible work from routine development.
Inspect the expected evidence list before agreeing a fee. It may include project plans, specifications, test results, meeting notes, timesheets and client correspondence, alongside records showing the hours attributed to the work. Agree how those records will be shared and protected; the data responsibilities matter as well as the tax analysis.
The additional information form asks for a named senior officer of the company who answers for the claim. The competent professional who judged the project is not named on the form, but their details should be kept in case HMRC asks. Ask who checks the form, who checks the notification deadline and who supplies the information needed to complete both.
Identify the people who will review the claim
Ask who is responsible for the technical narrative, what relevant qualifications they hold, and who will speak to HMRC if an enquiry begins.
A firm should name a contact and explain how its reviewers check the technical and financial evidence, rather than presenting claim volume as a substitute for a review method.
Use questions such as these to test the proposed team:
- How many R&D claims did you file in the last accounting year?
- How many are under enquiry, and how did each end?
- Who reviews the technical narrative, and what are their qualifications?
- Which scheme do you expect to use, and why?
- Which records will you ask us to keep, and how often will you check them?
- Who is our named contact if HMRC writes to us?
CIOT or ICAEW membership, or the Chartered Tax Adviser qualification, signals a minimum standard and a disciplinary framework. Verify membership on the body's own register, such as the ICAEW or CIOT "find an adviser" directories, rather than relying on a logo on a website. Check the firm's HMRC agent status and ask for proof that it is supervised for anti-money-laundering, using the gov.uk check of businesses registered for money laundering supervision. Then ask for the authority it will act under, such as Form 64-8 or an agent services account. HMRC's Tax Agent's Handbook sets out expectations for agents who file claims.
Put the fee and the risk in writing
Fees may be a fixed sum or a share of the credit. Ask exactly what the quoted work includes, whether enquiry support is included, and what happens to the fee if HMRC denies the claim.
A clear written scope makes it easier to compare offers and understand who is responsible for each stage.
Settle those points in the engagement terms before work starts, including who owns the client relationship and how additional work will be charged. The contract clauses to settle can help frame that discussion. Do not treat a percentage fee as proof that the adviser has assessed eligibility or that HMRC will accept the claim.
Rehearse the response if HMRC enquires
A firm should describe how it will manage a compliance check, including the evidence it can assemble and how it will meet information notice deadlines. Ask for a practical sequence, not just reassurance: HMRC can request records and an inaccurate claim may lead to repayment, interest and a penalty.
- Acknowledge the notice in writing before the deadline.
- Appoint one person to manage contact with HMRC.
- Gather project plans, test results, timesheets and the technical report.
- Reply with a structured technical narrative, rather than sending an unorganised batch of documents.
- Record the information notice deadline and enquiry window.
A careless error can attract a penalty of up to 30 per cent of the tax lost, while a deliberate error can reach 70 per cent, and a deliberate and concealed error 100 per cent. If confidence in the adviser breaks down, compare UK accounting providers by scope and capability.
Check whether the claim fits your business
R&D relief is for companies within the charge to corporation tax, not sole traders or partnerships.
Examples of UK firms that publish R&D tax credit services include BDO, RSM UK, Grant Thornton UK, Crowe UK and MHA; their presence in the market is not a recommendation or evidence that a particular claim qualifies.
The final test is whether the adviser can explain the route, evidence, named reviewers, fee and enquiry process in terms that match your business. If the answers leave responsibility unclear, or the firm cannot explain how it tests the technical account, pause before appointing it or authorising a filing.
