How do I switch R&D tax credit providers?

The four most important things to consider before switching R&D tax credit providers are:

• Your current contract conditions
• Your last claim report
• The onboarding process at the new provider
• Choosing the right provider

We find that companies tend to switch R&D claims advisors in two situations. Firstly, they’ve outgrown their existing provider (usually their accountant). This becomes clear once the R&D claim starts draining too much time from the tech team, and the finance lead takes on the role of a senior project manager to get the claim completed.

Secondly, businesses switch when they receive an enquiry from HMRC. In most cases, enquiries occur when an accountant or finance team member completes the claim. Enquiries typically take 6-12 months to resolve, so it’s a significant drain on resources. 

In all, it’s pretty standard for companies to want to switch providers. At EmpowerRD, 68% of our clients switched to us from another provider. Once you’ve decided to switch providers, we recommend taking the following factors into account!

Unfortunately, many R&D providers bring first-time R&D tax credit claimants into the scheme with multi-year lock-in contracts. If you’re not the person who sourced your previous R&D provider, then you may not be aware of a lock-in clause in your current agreement. Before searching for a new provider, we recommend checking your contract for any penalties for early termination.

Having a copy of your claim report can help you in two ways. Firstly, should HMRC issue an enquiry about any of your tax affairs, it will be essential to know what your claim report contained. Doing this helps you effectively defend your position.  

Secondly, having your previous claim report will help your new provider process your new claim efficiently. By seeing your past claim, the provider will be able to present a consistent picture to HMRC. That, in turn, will allow them to get the most for your new claim. Additionally, they may be able to retrospectively increase your past claim if you under-claimed. We were able to increase Bloom & Wild’s past claim by 290% this way!

At EmpowerRD, we go one step further by actually importing your past claim report into our claims platform. This allows your team to significantly speed up the data collection needed to complete the claim.

It’s a good idea to ask your new provider to give information about their onboarding process. We find that if the onboarding call is not well managed, then the whole claim becomes significantly delayed. We require that all claim stakeholders are on the first call, and we have a standardised process for helping our clients allocate their team effectively for the claim’s completion.

There are numerous providers out there, each with its own strengths and weaknesses. It’s worth making sure that you’ve done your research, making sure to choose the right provider for your size of business and industry. We tend to find that generalist accountants struggle to deal with a company’s claim once they reach 50 employees or more. Our guide to choosing an R&D tax credit advisor is a valuable resource to consult before selecting your provider.