Guide

How to choose an R&D tax adviser

The full process from shortlist to signature: deciding what you need, finding candidates, asking the twenty questions in writing, comparing proposals on the same claim, checking references and reading the letter clause by clause.

10 minute read

Choosing an adviser is a buying decision, and it rewards the same discipline as any other: know what you need, get the offers in writing on the same basis, read the contract, and keep the record. This guide walks through that process in eight steps. It does not recommend any adviser and it does not rank fee models. Every model on this site can be the right one for a particular business, and the steps below are how you find out which is right for yours.

Step 1: decide what you actually need

Before you speak to anyone, write down what you want help with. The answer shapes everything that follows, including what a fair fee looks like.

Some businesses need the whole claim prepared: the technical case, the figures, the forms. Others have a finance team who can do the numbers and want help only with the technical descriptions, or the reverse. Some want a review of a claim they have drafted themselves. Some are in the middle of a tax authority review and need help with that, which is a different job again. A first claim needs more explanation and more judgment than a repeat claim where the projects are the same as last year.

Write down, too, what you can bring to the work: how good your records are, whether the people who did the technical work can spend time on interviews, and whether anyone on your side has done a claim before. The in-house or adviser guide helps if you are not yet sure you need an adviser at all.

What the adviser will do, and what you will do
First claim, repeat claim, review of a draft, or help with a tax authority review
Who on your side can give time, and how much
The size of claim you expect, honestly, and the smaller figure it might turn out to be

Step 2: build a shortlist

Candidates come from your accountant, from businesses like yours, from professional bodies and from your own search. Treat every source the same way: an introduction is a lead, not a recommendation, and the person who introduces an adviser may be paid for doing so. The question on referral fees is one to ask early.

For each candidate, find out who they are before you ask what they charge. Where your country has a register of tax agents or preparers, check it; where it has none, check which professional body, if any, the firm and the named people belong to.1 Look for named people rather than "our team", and for experience in your field rather than in R&D claims in general. Three candidates is enough to compare; more than five is hard to run fairly.

Three to five candidates, from more than one source
For each: registration or professional body checked where one exists
For each: named people and their roles
For each: whether anyone was paid to introduce them

Step 3: ask the twenty questions, in writing

Send every candidate the same questions and ask for written answers. The questions to ask page has all twenty with a printable checklist, and the scripts give you the emails. Written answers are easier to compare than conversations, and they become part of the record if there is ever a disagreement about what was said.

The answers that matter most at this stage are the ones about money and risk: what the fee is a percentage of, whether there is a cap or a minimum, what happens to the fee if the claim is reduced, whether help with a review is included, and what ending the engagement costs. An adviser who answers all of these plainly, in writing, has told you a great deal about how they will behave once you have signed.

The same questions sent to every candidate
Written answers received from each
A worked example on your own claim figure from each

Step 4: compare the proposals on the same basis

Different fee models cannot be compared by their headline numbers. A percentage, a fixed fee, a capped percentage and an hourly estimate are different shapes, and each looks cheaper at some claim sizes and dearer at others. Put every proposal on your expected claim and on half of it, add the extras each one charges, and look at what each costs if the claim is reduced after filing. The how to compare proposals guide does this step by step, and the fee comparison calculator does the arithmetic.

Do this fairly. A percentage fee needs no money up front and shares the risk of a claim that fails; a fixed fee is predictable and does not rise with the claim; a cap combines the two; an hourly rate pays for time actually spent. Which suits you depends on your claim size, your cash position and how sure you are of the outcome, not on the model's name.

Every proposal costed at the expected claim and at half of it
Extras added: review support, minimums, hourly work outside the scope
The downside costed: the claim reduced after filing, the claim failing

Step 5: check references

A proposal tells you what an adviser intends. A reference tells you what happened. Ask each remaining candidate for two or three clients of similar size, including at least one whose claim has been through a tax authority review, and call them. The reference check guide has the questions. Ask the reference how the fee was worked out, whether they saw the claim before filing, what happened in the review, and whether they would sign again.

Written testimonials chosen by the adviser tell you less than a conversation you lead. A candidate who cannot offer a reference whose claim was reviewed is not necessarily a problem; a review is not something every client has had. But it means you are relying on the proposal alone.

Two or three references per candidate, at least one reviewed
References called, not emailed
The same questions asked of each reference

Step 6: read the letter clause by clause

The engagement letter is the deal. Read all of it, including any standard terms it refers to, with the contracts section beside you. The ten clauses there are the ones that decide what you pay, who carries the risk and how you leave: fee basis, what counts as the benefit, review support, fee refund if the claim is reduced, termination, ownership of records, liability, who signs the claim, confidentiality, and renewal.

For each clause, ask whether it says what the proposal said. Proposals are written to win the work; letters are written to govern it, and the two do not always match. Where the letter is silent on something that matters to you, ask for a sentence. Where it says something you cannot live with, say so now. Contract law differs by country, so ask a lawyer to review the letter before you sign it.

Every clause in the contracts section found in the letter, or its absence noted
The letter matches the written answers to the twenty questions
Standard terms read, not just referred to
A lawyer has reviewed the letter

Step 7: negotiate what matters

Terms in a letter can be discussed, and a short, polite request with a reason is the way to open the conversation. The terms worth the effort are the ones that move risk: a cap on a percentage fee, a fee on the amount received rather than the amount claimed, review support written into the price, a refund clause that works in both directions, records returned without charge, and a notice period of three months or less. The how to negotiate fees guide takes each in turn, and the script for asking for a fee cap shows the tone.

Negotiate with the adviser you want to work with, not with all of them. The point is a letter you can live with, not the lowest number.

The three terms that matter most to you, written down before you ask
Each request made in writing, with the reason
The answers written into the letter, not agreed by email

Step 8: sign, and diary the dates

Once the letter says what you need it to, sign it and file it where you will find it again. Then put three dates in the diary: the date you expect to see the full claim before filing, the renewal or notice date if the letter renews, and the end of the period in which the tax authority can review the claim in your country.2 Those dates are when the letter will matter again.

Keep every email from the selection. If the relationship goes well, you will never need them. If it does not, they are the record of what was promised. The managing an adviser year to year guide picks up from here.

Signed letter filed, with the standard terms and the written answers
Three dates in the diary: review of the claim, renewal or notice, review window
The adviser health check run once a year

Sources

How to check an adviser's registration or credentials: IRS, "Understanding tax return preparer credentials and qualifications" and "PTIN requirements for tax return preparers" (United States); HMRC, "Tax advisers to register with HMRC and meet minimum standards" and manual MTAR10100 (United Kingdom); Revenue, Tax and Duty Manual Part 37-00-04b, which says Revenue does not approve tax agents or advisers (Ireland); CRA, "Using a professional tax preparer" (Canada); Tax Agent Services Act 2009, Part 3, the code of conduct for registered tax agents administered by the Tax Practitioners Board, and the Board's complaints form (Australia); Inland Revenue, "Tax agents" and "Tax agent status" (New Zealand); IRAS, "IRAS-Tax Agent relationship" (Singapore). More detail on your country page. Back
A tax authority can review a claim after it has been paid, within time limits set by law: Internal Revenue Code section 6501 (United States); Finance Act 1998 Schedule 18 paragraphs 24 and 46, via HMRC Enquiry Manual EM1510 and Compliance Handbook CH51300 (United Kingdom); Taxes Consolidation Act 1997 section 959AA, via Revenue Notes for Guidance Part 41A (Ireland); Income Tax Act section 152(3.1) and (4) (Canada); Income Tax Assessment Act 1936 section 170, Income Tax Assessment Act 1997 section 355-705 and the ATO, Request an amendment to a business or super tax return (Australia); Tax Administration Act 1994 section 108, via Inland Revenue SPS 20/03 (New Zealand); Income Tax Act 1947 section 74 (Singapore). More detail on your country page. Back

General information about choosing and managing an adviser. It is not advice on whether your work qualifies for R&D tax relief.

KnowYourFees.org is published by Swanson Reed, an R&D tax advisory firm that competes with other advisers. This site does not recommend any adviser, including Swanson Reed.