Learn What A Career in R&D Tax Can Offer You And Why It Is The Number One Choice For Many Professionals
Published over 3 years ago by Medet Ali
The UK has always been a forward thinking and innovative country as shown by the industrial revolution which advanced the UK enormously and secured its position as a leading economy. However, the future of our economy is no longer in manufacturing … China and India have that covered. In order to maintain a strong economy, we must innovate.
This is why the Government introduced R&D tax relief to the UK back in 2000. Under this scheme, companies can claim relief from the Government in the form of a cash payment or tax deduction if their activities are classified as ‘innovative’. However, the process of making a claim is highly nuanced. This has created a market for accountancy firms and niche consultancies to aid in this process.
This article has been written for both technical professionals, such as engineers, and tax professionals who are considering a career in R&D within an accountancy firm or niche consultancy. It will provide you with an overview of what a career in R&D entails, the benefits associated with a career in R&D and will discuss the stability of the R&D sector moving forwards. In order to relay the most accurate information on R&D, I spoke to a number of directors and partners to find out what really goes on in the field of R&D and what a career in this sector truly entails.
So what would you actually be doing in a career in R&D?
An R&D consultant will spend a great deal of time visiting client premises across the UK to review their innovation. You will gather information from the clients on the facets of their innovation which you believe to be eligible under the UK R&D scheme. You may also need to research around their activities to make sure you fully understand what they are developing and what they are striving to achieve. You are likely to be working in a team on projects and therefore you will have to liaise with other team members to ensure you are all progressing at a pace that will enable you to meet your deadlines. Additionally, you will be in frequent contact with both HMRC and your clients to answer any queries regarding the project. Finally, when you have collated all the information you have gained, you will compile a technical report to submit to HMRC using guidelines to support your assertions. Finally, once the project has been concluded with HMRC, you can call your client with the good news of how much they will receive.
Being a step ahead
As one of the directors of an R&D consultancy relayed to me, it’s a job that allows you to always be looking forward. In order for you to submit a claim on behalf of the company, you have to first understand their innovation. This means that an integral part of your new role will be visiting client’s premises and seeing what they’re developing. Regardless of your background, you would have access to the latest innovation across a diverse range of sectors. This can span from the defence sector where you might preview the latest in weaponry and tanks to a chocolate shop looking to innovate in order to retain quality through mass production. The possibilities are endless. In addition, you will be seeing this innovation at its fledgling stages which means other people won’t even know about its existence until years later.
In your current role, are you able to say that your work facilitates tomorrow’s innovation? Such a positive outcome of your work is a professional rarity. In R&D it’s not rare at all. For example, a partner stated that they secured funding for a small company that were developing the latest technology in robotic prosthetic limbs for amputees. The funding that the partner and his team secured was essential to the continuation of their life changing work.
If you’re coming from a tax background, this dimension will completely change the way you interact with your clients. In your current role, you will typically be informing clients how much they will have to pay (even if you are saving them money). However, in R&D you will be telling them how much they will receive from the government – it enables much more positive relationships with your clients.
Utilise all of your skills
Through a role in R&D, you will not only enhance your existing skills but it will enable you to develop many more.
Firstly, it will perfect your organisational skills. If you have specialised in engineering you may only be working on one project at any given time. However, in R&D you would be working on a number of projects at the same time which means juggling multiple timelines, deadlines and queries from both your clients and HMRC. Up to the challenge?
You will also develop your skills of persuasion. Within the current legislation, the definition of what constitutes R&D is fairly generic. Therefore, it will be your responsibility to utilise your knowledge of the scheme in order to tailor your argument accordingly to highlight why your clients activities can be defined as innovative. You will then support your assertions with the information you gathered from your clients to substantiate your claim.
You will increase your commerciality and widen your scope to look at the bigger picture. You will begin to analyse not just whether a company can innovate a new product but whether it is commercially viable to do so. This will include analysing in what direction the surrounding technology is going and the costs that a company would have to subsume in staff allocation and resource allocation.
Additionally, you will become much more confident in yourself. In this role, you will have to talk to directors and CEO’s as well as engineers and technicians to name a few. You will develop the ability, and therefore confidence, to know you can talk to anyone in any given social situation.
Free as a bird
This job is not your typical nine to five desk job. You will be given the opportunity to travel across the UK to look at the innovation taking place at client premises.
Furthermore, by specialising in R&D, you will have the option to work abroad. R&D relief is practiced in over forty countries worldwide. The basic understanding of what constitutes as innovation is fluid across borders and therefore you would only need to learn the changes in the legislation upon taking a new position in a different country.
Be a coy carp in a pond of goldfish
For both tax professionals and engineers, the realm of R&D offers better promotion prospects than you might have imagined. In facets of tax, such as corporate tax, the field can be quite competitive which sometimes means a queue for promotion. In addition, many engineers encounter a glass ceiling. Once they are technically competent in a specific area, they are made to complete projects in that same field over and over again. R&D is different. There is such substantial growth in this sector that the norm in one firm is that their professionals are promoted every six months up to assistant manager level. Following this, promotion is only dependent on their ability to prove they can function at the higher level. Additionally, there are no glass ceilings for engineers within the sector. In fact, one of the partners I spoke with from a Top 10 accountancy firm not only has an engineering background but is the youngest person to make partner in that firm!
How stable is the future of R&D?
The answer: very stable.
Innovation is the way forward for all economies in the world. As previously mentioned, around forty countries employ R&D tax incentives as a way to encourage innovation across the board and every year more countries introduce some sort of incentive mechanism to stimulate innovation. Out of all the countries which have introduced the scheme, the only one to repeal their scheme was New Zealand and they are reintroducing their R&D scheme this year.
Not only is the scheme essential to stimulating innovation for the future economy but it is also integral to the stability of our current economy. Without these incentives from the government, corporations that can move abroad ultimately will. This would result in a sink hole of professionals, skills and cash in the UK economy.
Furthermore, the British government have maintained a healthy relationship with the scheme since its introduction. It was the Labour government that introduced the scheme back in 2000 and investment in the scheme was further increased by the coalition government. It is also important to bear in mind that despite the UK entering into one of the worst financial crises in 2008, the government still maintained investment in R&D.
As I previously mentioned, if the UK were to crumble and our economy plummeted to the ground and disintegrated into a puff of smoke, you could just hop on a plane and start afresh in a new country.
To conclude, the sector of R&D is a positive one – both in terms of the benefits of a career and in regards to its future. It allows you to glimpse at what the future holds and be directly involved in building that vision. It will enable your complete professional development and you can bet your position (and salary) will reflect your capabilities. Finally, your specialisation will never act as a ball and chain weighing you down to the UK. Like any career, it does come with its challenges but I personally feel that the benefits far outweigh any challenges you could face in the position.
Contact us for more information