What is a Source Advisors enquiry report?
Our enquiry report will give you a straightforward opinion which will suggest your next steps.
We will produce a fixed fee enquiry report for you that details what HMRC are asking and how this aligns with the submission you made. We will break down our comments on the technical robustness of the claim, the financial appropriateness of the claim and if there are any other areas in need of attention.
From our enquiry report you will know how to handle the HMRC enquiry and what needs to be done.
We will label the project:
Green – you are in a strong position to respond to HMRC.
Amber – there could be areas of improvement and dealing with the enquiry may be challenging.
Red – a situation needs urgent and significant attention.
Patent analysis to demonstrate the R&D baseline
As part of an enquiry HMRC is likely to ask the question “How did you establish the baseline for your R&D?”. Using patent information can be a fundamental part of demonstrating that an R&D project is seeking to achieve an advance in overall knowledge or capability. This in turn establishes the baseline.
Many businesses assume they know what the baseline is just because they have been in the industry for a few years or decades. But one way to be absolutely certain is to analyse the patent landscape. Often products and technologies never make it to market, so effectively remain “hidden”. This can be because of a change in company leadership, direction, or market strategy. Or maybe the process is still in progress or has stalled because of an issue with the patent or the cost. Your competitors may have carried out the R&D before you, even if they don’t currently sell an innovative product.
Source Advisors can provide a snapshot of the patent situation for a specific technology that answers the baseline question for HMRC.
Can Source Advisors review an R&D tax credit claim without receiving a letter of enquiry from HMRC?
Absolutely. We can offer the same service against any of your previous submissions so that you have a clear understanding of any potential risks you’re carrying. You will have confidence that you’re in good shape and there are no surprises coming down the line. It also alerts you to any issue to be aware of in your next claim given an ever changing landscape. This proactive approach can be even more valuable when a business is looking to raise money and the value of R&D tax relief is a point of review in the due diligence process.