How To Spot “Cowboy” R&D Tax Firms – C.A.R.T.A. Campaign Advocating Real Tax Advice

If you’re an innovative UK company or an accountant, you will almost certainly have heard of R&D (Research & Development tax relief), most likely because one of the many “cowboy” firms will have pestered you with telephone calls and emails.

It is an important and thriving sector because it is not economical for most accountancy firms to employ their own R&D tax specialists (in other words, qualified tax professionals who focus exclusively on R&D and nothing else). Some claims are fairly simple and don’t need specialist advice, but most claims have complex aspects which may jeopardise an accountant’s professional indemnity insurance – therefore most clients and accountants prefer to be safe rather than sorry, by utilising the services of an external R&D tax specialist.

However, many non-tax entrepreneurs have seen this opportunity and set up firms in recent years, claiming to be R&D tax experts – as with PPI reclaims, many of these firms are “pop-up shops” with the sole intention of capitalising for the short-term and then moving on to the next hot topic to cash in on.

So how can an innovative business or an accountant differentiate between a genuine R&D tax specialist firm and a “cowboy”?

Well, it can be difficult, but here are some questions that businesses and accountants should ask themselves before appointing an R&D tax specialist:

1) Does the specialist employ one or more Chartered Tax Advisers? If they don’t, you should ask yourself how a firm claiming to be R&D tax experts doesn’t employ anyone fully qualified in tax?

2) Does the specialist have the words “claims”, “reclaims”, “rebates” or “refunds” in their business name? In my experience, these words are synonymous with “cowboy” firms.

3) Was the firm set up in the last five years? The more established R&D specialist firms tend to be the more genuine firms, in the industry for the long-term, past and future.

Please note that this list is not exhaustive or definitive, and is based on my opinion alone, but it will do no harm to ask these questions and hopefully it will help clients to obtain real tax advice.

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