When claiming R&D tax relief, one of the most important aspects is having the right professionals involved. HMRC has clarified they expect to see a "competent professional" involved in any claim. But what exactly does that mean?
A competent professional is someone who has the necessary technical knowledge, experience, and qualifications relevant to the specific area of R&D your business is engaged in. They must have a strong understanding of the scientific or technological principles involved and be able to judge whether your project is truly advancing knowledge in the field.
What Makes a Competent Professional
It is not enough for a professional to have a general interest or basic knowledge in the field. HMRC wants to see individuals who are deeply knowledgeable and experienced in the area of technology or science that the R&D claim is related to. This can include having:
- relevant qualifications in the field
- practical experience working on similar projects
- an established track record of success within the industry
- a clear understanding of the current state of knowledge in the field
A competent professional should be able to demonstrate these attributes and clearly explain how their experience supports the R&D claim being made.
How HMRC Defines Competent Professionals
HMRC expects a competent professional to possess the following qualities:
- an in-depth understanding of the relevant scientific or technological principles involved in the R&D
- knowledge of the current state of knowledge in the field
- practical experience and a proven record of success in similar projects
Who Can Be a Competent Professional
Typically, the person most suited to the role of a competent professional will be directly involved in the R&D project. This could be someone within your team or an external advisor with specific expertise. The key is that they must have a strong technical background aligned with the area of R&D and be able to speak to the specifics of your project.
What This Looks Like in Practice
Understanding what a competent professional looks like can be easier with a bit of context, so here are a couple of examples based on HMRC guidance and industry best practice.
In engineering, take a business that is developing a new hydraulic actuator for use in aerospace systems. Their competent professional is the senior mechanical engineer leading the project. He holds a master's degree in mechanical engineering, is a chartered engineer, and has over fifteen years of experience designing advanced fluid power systems. He is regularly engaged with the latest technical literature and standards in the field. Because of this, he is able to identify genuine technological uncertainties and explain how the project aimed to achieve an advance that was not readily deducible by a competent professional in the wider industry.
In software, consider a company developing a machine learning algorithm to detect defects in manufacturing parts using real-time video analysis. The competent professional here is the head of data science, who has a PhD in computer science and a background in leading applied AI projects both in industry and academia. She can clearly explain why off-the-shelf models were not suitable and how the team had to experiment with new techniques to resolve performance limitations. Her involvement helps demonstrate that the work met the criteria for qualifying R&D.
Why It Matters
Having a competent professional involved is not just about meeting HMRC's requirements, it also adds strength to your claim. Their qualifications and experience are what provide the necessary assurance that the project truly qualifies for R&D tax relief. This professional is the one who can ensure the claim is properly supported, making it much less likely to be challenged by HMRC.
How We Can Help
At TaxTek, we understand how important it is to have the right experts involved in your R&D claim. Our team is made up of professionals with a wealth of experience in different technical fields, and we work closely with businesses to ensure that their claims meet all the requirements. We can help you identify a competent professional to support your claim, guiding you and your team through the process to make sure everything is in order.
If you are unsure whether your project qualifies or if you need help identifying the right internal experts, we are here to support you. Our goal is to make the R&D tax relief process as straightforward as possible while ensuring full compliance with HMRC guidelines.
