What is meant by ‘Competent Professional’

Guidelines on the meaning of Research and Development for tax purposes state that, the seeking of an advancement in the field must overcome a scientific or technological uncertainty which is not readily available or deducible by a competent professional working in the field. “Uncertainties that can be readily resolved by a competent professional working in the field are not scientific or technological uncertainties”.

With HMRC increasingly questioning the credentials of professionals here, I look at what is meant by the term ‘Competent Professional’ and what attributes should they be able to demonstrate?

The term ‘Competent Professional working in the field’ has not been defined in the legislation but guidance is given in the HMRC internal manual. The individual deemed by the claimant company as a Competent Professional should be able to demonstrate a high degree of skill, knowledge and experience in the field:

·      Be knowledgeable about the relevant scientific and technological principles involved,

·      Be aware of the current state of knowledge, and

·      Have accumulated experience and be recognised as having a successful track record.

·      Simply having worked in a field or having an intelligent interest in it does not, by itself, make a person a Competent Professional.

·      There may be differences of opinion between Competent Professionals in a particular field. Where the view taken is a legitimate one, and it has been reached a Competent Professional properly exercising his expert judgement then it should be normally accepted.

An opinion offered by a claimant company as being that of a Competent Professional would need to explain clearly, without the use of jargon, what the advance is and why it is an advance in the overall field, rather than just the company’s own state of knowledge or capability. It should also review the current state of knowledge and work carried out.

The opinion of the CEO, Managing Director, Financial Director may not necessarily be the view of the expert and are often not the Competent Professional. It is interesting to note that the new claim ‘Additional Information Form’ requests details of the main senior internal company R&D contact who is responsible for the R&D claim but, does not require details of the Competent Professionals. ThirdRock strongly recommends that the early identification of the Competent Professional is of vital importance in providing the required level of compliance of a claim and a technical R&D Report accompanying the claim should include a profile of the Competent Professional(s) involved in the project(s).

Note for editors:

Chris Williams is a Fellow of The Association of Taxation technicians and Director/Founder of ThirdRock.