A recent survey reveals that 78% of accountants have reported that their clients failed to claim R&D tax relief following policy changes by HMRC.

According to a recent survey conducted by innovation incentive experts, ForrestBrown, more than three quarters (78%) of accountants have seen clients unable to make an R&D tax relief claim due to failure to notify HMRC under the new requirements for claim notification. This highlights the significant risk that businesses face when failing to comply with the updated policy.

The survey also revealed that over half (57%) of accountants cite HMRC enquiries as a serious pain point for their clients, indicating that confusion around the new claim notification policy could be costing UK innovators. This is a concerning trend, as lack of awareness of the rule change process could be hindering businesses carrying out genuine R&D.

Accountants are already facing increased pressure and time constraints as they adapt to the merged R&D tax relief scheme. The survey found that eight in ten accountants (80%) say claims take longer to prepare than a year ago, with more than a third (35%) noting a ‘significant’ increase in time. Additionally, over three quarters (77%) have had to invest in additional training to stay up to date with R&D tax relief changes, highlighting the mounting time and financial pressures firms are under to keep pace with shifting regulation.

The survey also revealed specific technical hurdles that accountants are facing, as they simultaneously adapt their processes to keep up with claims becoming more complex. More than half (55%) say they struggle with writing project descriptions for the Additional Information Form and a further 64% say establishing who has the right to claim under the new guidelines on contracted out R&D is one of the most challenging aspects. More than half (57%) also reported that HMRC enquiries are one of the biggest pain points.

Kelly Oakley, Associate Director at ForrestBrown, commented on the survey results, saying: “Unsurprisingly, changes made to the R&D tax relief incentive are creating challenge for accountants and their clients alike. More work is needed to put together a robust claim that meets HMRC requirements, and the new rules create complexity. This is prompting some accountants to review how they provide R&D tax advice which for some means choosing to partner with a specialist to supplement their own expertise.”

ForrestBrown is the UK’s leading R&D tax specialist and innovation incentives consultancy. With a team of over 100 qualified chartered tax advisers, accountants, lawyers, and industry-experienced sector specialists, the company offers unmatched technical expertise and is passionate about helping innovative businesses to grow. In 2023, they were named ‘Best Independent Consultancy Firm’ at The Taxation Awards.

For further information, please contact:

Priyanka Dutt

Account Director

Rostrum

ForrestBrown@rostrum.agency

Julian Sims

Senior Account Executive

Rostrum

10 Stukeley Street

London

WC2B 5LQ

m: 07775892493

e: j.sims..@..rostrum.agency