If you’re applying for R&D Tax Credits, you need to identify a ‘competent professional’. But who qualifies as a competent professional?
If you’re an innovative company, there’s a good chance you’ve heard of the R&D Tax Credits scheme.
In case you haven’t, it’s a government-funded incentive which provides financial support and relief for companies conducting R&D.
If you have, you may have come across the slightly nebulous term ‘competent professional’.
And you might be wondering, as a lot of people do, what the heck it means in the context of your claim.
What is a competent professional?
A competent professional is someone at your company with significant expertise in the field in which you’re conducting R&D.
This expertise may have been acquired at university or during an apprenticeship. Or possibly through working in the industry for a number of years. Either way, the key is it has to be extensive and relevant to your R&D.
As an example, if you’re trying to make a new kind of beer (yes, you can claim R&D Tax Credits if you’re making beer!), your competent professional would probably be a chemist with a background in brewing.
They wouldn’t be, say, a software developer who’s decided they want to try their hand at whipping up a new IPA.
If you’re a company with sufficient in-house expertise, a competent professional is probably already running your development work. Still, HMRC has high standards for who qualifies. It can’t be any old ‘expert’.
So let’s be clear about what it’s looking for. In HMRC’s eyes, a competent professional is someone with enough technical knowledge to determine when there’s a genuine need for R&D.
To quote the guidance, the competent professional needs to meet the following key criteria.
- be knowledgeable about the relevant scientific and technological principles involved
- be aware of the current state of knowledge
- have accumulated experience and be recognised as having a successful track record.
This amounts to someone who knows what kind of development work is needed to move your project work forward. And someone who can differentiate between work that contributes to R&D and work that’s ‘routine’. Which means it doesn’t contribute to any kind of advance.
The crux of any R&D Tax Credits claim is proving your work addresses scientific or technological uncertainties.
These are points in the development process where you’re not sure how to take your project forward.
The presence of the competent professional is what validates a technical uncertainty as something that can only be deduced with R&D, and not with preexisting knowledge or publicly available information.
In other words, if the competent professional doesn’t know how to move forward, chances are no one does. And so you need to conduct R&D.
Competent professionals and your R&D Tax Credit claim
It’s useful to include information on your competent professional in your application, like evidence of their competence, experience and qualifications.
This adds weight to your technical narrative.
You should also position them as the person leading your development work, identifying the technical uncertainties you sought to overcome, and making decisions on where to focus development efforts.
In theory, the competent professional should also be the one identifying which R&D work you’ll be applying for tax credits for.
In practice, however, identifying tax credits-eligible work can be a collaborative effort. And it will be if you’re working with an R&D Tax Credits expert like GrantTree.
We can help you identify any and all work that qualifies for tax credits support, making sure you’re claiming for every penny possible.
If you have any questions about who from your team qualifies as a competent professional, or R&D Tax Credits generally, then give us a call.
One of our tax credits experts would be happy to help.