Guide

Managing an adviser year to year

Oversight, reviewing each claim and renewing the engagement: the yearly cycle with an adviser, from records and dates at the start of the year to the renewal decision at the end.

8 minute read

Signing the letter is the start of the relationship, not the end of your part in it. An engagement that runs well year to year has a rhythm: records kept as the work happens, the year's claim scoped before the work starts, your technical people interviewed and reading the result, the full claim reviewed before filing, the file kept afterwards, and a decision each year about whether and how to renew. This guide sets out that rhythm in seven steps, so that oversight takes a few hours a year rather than a crisis every few years.

Step 1: set up the year

At the start of each accounting period, do three things that make everything later easier. Agree a simple way for project teams to record time and decisions as they happen: which projects are candidates, who is working on them, what was tried and what was hard. Put the dates in the diary: the accounting period end, the filing deadline, the date you expect to see the full claim, the notice or renewal date from the letter, and the end of the period in which the tax authority can review last year's claim.1 And read the engagement letter again, because the terms you agreed a year ago are the terms that apply.

Time and project decisions recorded as the work happens
Five dates in the diary
The engagement letter re-read, with the fee basis and notice date noted

Step 2: scope the year's claim before the work starts

Before the adviser begins, agree in writing what this year's claim will cover: which projects, which people, which costs, and which of last year's projects have continued. Confirm the fee on this year's expected claim, with a worked example, even if the letter carries the basis forward; a percentage fee on a claim that has doubled is a different number, and a cap agreed last year may need checking against this year's figure. On the shared example, a 20% fee capped at $60,000 is $50,000 on a $250,000 claim and stays at $60,000 if the claim grows to $500,000. Illustrative figures.

Agree the timetable too: when interviews happen, when the draft arrives, how long you have to read it, and the filing date. The script for asking to see the claim before filing covers the last part.

Projects, people and costs for this year agreed in writing
The fee worked on this year's expected claim
Timetable agreed, including review time before filing

Step 3: give the adviser what they need, and no more

During the work, make your technical people available for interviews and make sure the adviser is talking to them rather than only to finance. Give the records the adviser asks for, in the form they ask for them, and keep a copy of everything you send. Treat your information as yours: the confidentiality clause says who the adviser may share it with, and if a subcontractor appears who was not mentioned, ask.

Keep a short log of the year: who was interviewed and when, what was sent, what was asked. It takes minutes and it is what a review can ask for.

Technical people interviewed; dates logged
Records sent in the form asked for; copies kept
Any subcontractor named and under the same confidentiality terms

Step 4: review the full claim before filing

This is the step that matters most, every year. Ask for the complete claim: the figures, the calculations and the technical descriptions, not a summary. Give the technical descriptions to the people who did the work and ask them whether they are true. Check the figures against your own records. Check that projects you doubted have been handled as agreed, and that anything the adviser said would be left out has been left out. Then approve the final version in writing, and keep a copy of what is filed.

If something is wrong, say so and have it changed before filing. A claim is in your name, and the business answers for it on review. The can we see the full claim before filing question and the green flag on seeing the whole claim say what good looks like.

Full claim received, with time to read it
Technical descriptions read by the people who did the work
Figures checked against your records
Final version approved in writing; copy kept

Step 5: after filing

Once the claim is filed, three things remain. Keep the file: the claim as filed, the working papers, the adviser's calculations, the correspondence, and your log of the year. Ask for anything you do not have while the engagement is running; the ownership of records clause says what you are entitled to. Note the date the benefit arrives and check the fee invoice against the letter and the worked example. And diary the end of the period in which the tax authority can review this claim, because the file must be kept at least that long.

Claim as filed, working papers and correspondence kept together
Fee invoice checked against the letter
Review window for this claim in the diary

Step 6: decide about next year before the notice date

Every year, before the notice or renewal date, decide whether to continue, and on what terms. Run the adviser health check with the year's experience in mind. Ask yourself whether the process ran as the letter said, whether your technical people were interviewed, whether you saw the full claim in time, and whether the fee was what the worked example said. Ask the adviser to confirm next year's fee on next year's expected claim. If the claim has grown or the work has changed, that is the moment to ask for a cap or a different basis.

If you decide to leave, give notice in the form and by the date the letter requires, and ask for your records first; the switching advisers page and the script for giving notice cover it. If you decide to stay, write down why, and write down the fee you have confirmed.

Health check run; the year reviewed against the letter
Next year's fee confirmed in writing on next year's expected claim
Decision made before the notice date; reasons noted

Step 7: if a review letter arrives

A letter from the tax authority about a past claim is not an emergency, but it has a deadline. Tell the adviser the same day and ask what the review support clause provides. Gather the file for that year. Take advice before you reply if anything about the claim worries you. The claim reduced on review page and the how do you handle a tax authority review question set out what to expect and what to ask. If the engagement has ended, check whether the support clause survived it; if it did not, the getting independent advice page says who can help.

Adviser told the same day; support clause checked
File for that year gathered
Advice taken before replying if anything is in doubt

The year on one page

For a business that wants the whole cycle in one place, this is it. Copy it into whatever you use to plan the year and tick it off as you go.

Start of the period: records kept by project; five dates in the diary; engagement letter re-read
Before the work: projects, people and costs agreed in writing; fee worked on this year's expected claim; timetable agreed
During the work: technical people interviewed and dates logged; records sent in the form asked for, copies kept; subcontractors named
Before filing: full claim received with time to read it; technical descriptions read by the people who did the work; figures checked; final version approved in writing
After filing: claim as filed, working papers and correspondence kept together; fee invoice checked against the letter; review window diaried
Before the notice date: health check run; next year's fee confirmed in writing; decision made and reasons noted
If a review letter arrives: adviser told the same day; support clause checked; file gathered; advice taken before replying

None of these steps takes long. Together they mean that the engagement is governed by the letter you signed and the record you kept, rather than by memory, and that a review years later finds a file rather than a search.

Sources

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.

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