R&D tax credits can be hard to understand. They can help your company get money back for new projects. You might want to hire someone to help you with this. But not all R&D tax credit providers are good at it. Picking the wrong one can cause problems. You might miss out on money, have to deal with extra checks, or even pay fines.
We’ll tell you what to watch out for when choosing someone to help with R&D tax credits.
No Knowledge of Your Business Type
R&D tax credits are different for each type of business. What counts for a software company is not the same as for a drug company or a factory. If the helper doesn’t know your type of business well, they might:
- Miss chances to get you money
- Label your work wrong
- Make mistakes in your claim
Watch out for:
- Providers who can’t show they’ve worked with businesses like yours before
- Providers who don’t have stories from happy customers in your field
- Providers who don’t ask many questions about what your company does
Why this is important: If the helper misses things or gets them wrong, you might not get your money. The government might also want to check your claim more closely.
No Clear Plan
A good R&D tax credit provider should have a step-by-step plan to find and claim your credits. They should:
- Look at all parts of your business carefully
- Keep good records
- Tell you clearly how they get the information they need
Watch out for:
- Providers who don’t explain how they work
- Providers who say you can get money easily without much work
- Providers who don’t visit your workplace or look at your projects closely
Why this is important: Without a good plan, the R&D specialist might miss important details. This could mean you get less money than you should. Or, they might make mistakes that cause the government to check your claim more closely.
No Help if Your Claim is Checked
Sometimes the government wants to check your R&D tax credit claim. Even if you have good records, this can happen. A good specialist should:
- Stand by their work
- Help you if the government wants to audit your claim
Watch out for:
- Specialists who won’t promise to help if your claim is audited
- Specialists who ask for extra money to help with an audit
- Specialists who stop talking to you after they send in your claim
Why this is important: If you don’t get help during an audit, you might lose your tax credits. You might also have to pay fines if you can’t explain your claim well.
Promising Too Much
Be careful of R&D tax credit specialists who promise you’ll get a specific amount of money back and say you qualify for tax credits before they look at your business closely. These specialists might be using the same plan for every business without understanding what makes yours different.
Watch out for:
- Specialists who say you’ll get your money back if you don’t get credits
- Specialists who promise you’ll get more money than seems possible
- Specialists who push you to claim more or include work that might not qualify
Why this is important: Specialists who promise too much often do this to sell their services. This can cause problems for you later. You might have to deal with extra audits from the government or pay fines.
Not Caring Enough About Records
When you claim R&D tax credits, you need good records. Your specialist should help you:
- Collect and keep detailed records
- Write down what each project was about
- List what each employee did
- Track all the money you spent
Watch out for:
- Specialists who say you don’t need many records
- Specialists who rush through this part
- Specialists who don’t ask for detailed information about your projects and costs
Why this is important: Bad records are often the main reason why claims get rejected or checked more closely. If a specialist doesn’t focus on this, your claim might not be accepted.
Not Clear About Costs
You should know exactly what you’re paying for when you hire an R&D tax credit specialist. Some specialists charge a percentage of the tax credits you get. This is normal, but they should tell you clearly how they set their prices.
Watch out for:
- Specialists who don’t explain their prices clearly
- Specialists who don’t give you a list of all the costs
- Specialists who have hidden fees or complicated pricing
Why this is important: If the specialist isn’t clear about costs, you might end up paying more than you thought. It also makes you wonder if you can trust the specialist. Always ask for clear pricing information. Don’t work with specialists who won’t give you this information.
Final information
Picking the right R&D tax credit specialist is a big deal for your company. It can mean more money to grow your business. But if you choose the wrong one, you might miss out on money or even get in trouble with the government.
Remember what we talked about earlier. Look for a specialist who knows your type of business, has a clear plan, and will help if the government checks your claim. They should also keep good records and be honest about their prices.
Take your time to find the right specialist. Ask lots of questions. Make sure you feel comfortable with them. A good specialist will be open about how they work and happy to answer your questions.
