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I remember the debates that went into designing a risk-based integrity management (RBIM) framework for pipelines. Being part of that team showed me how structure, auditability and domain expertise can transform compliance.
We need to apply those same principles to the UK’s R&D tax relief scheme.
The missing standard
The R&D tax relief scheme is one of the only government programmes that does not have a standardised way to assess claims.
Most claims are put together by advisers who rely on the claimant’s technical staff to decide if a project meets HMRC’s criteria. The adviser helps write the story and compile the numbers, assuming the claimant’s technical opinion is correct.
That story then lands on the desk of an HMRC officer, who often does not have the technical background to judge whether the claimant’s work genuinely advances science or technology. The eligibility decision is based on a single narrative, written by non-specialists, describing a technical opinion that HMRC is not equipped to evaluate – no wonder outcomes are inconsistent, disputes are rising and both businesses and HMRC are frustrated by a process that lacks structure and transparency.
This is exactly the kind of multidisciplinary problem that engineering principles are meant to fix. It reminds me of pipeline failures that happened when teams were not on the same page. Back then, the answer was RBIM. Today, the answer is to apply that same engineering discipline to R&D tax relief.
That’s why I am calling for the introduction of independent assessments and certification in the R&D claims process to reduce the risk of non-compliant claims and drive innovation in the engineering sector.
Why this should matter
So why should this matter to engineers? First, R&D tax relief is one of the last big funding levers left for technical innovation in the UK. It supports thousands of engineering-led projects every year. If we do not help protect its credibility, we risk losing it.
Second, the scheme is increasingly being interpreted by people without technical backgrounds. When financial officers at HMRC are left to judge technical merit, it is up to us to make sure the technical case is clear and independently validated.
Here is the most exciting part. Applying engineering discipline opens new roles for engineers as assessors, reviewers and certifiers of R&D work. If you are chartered and experienced, you are exactly the kind of person who can help make sure the system works as it should.
A professional call to action
My message to fellow IMechE members is simple – get involved. If the tax relief system does not understand engineering, then it is time we brought engineering back into the system.
Start with your own R&D claims. Treat them with the same rigour you would expect from a design review: use a structured framework; document your decisions; and ask a peer to challenge your assumptions.
You wouldn’t build a bridge on a hunch. Do not build an R&D claim on one either.
Reform of the R&D process will only happen if we engineers work together to safeguard the funding engine that powers our industry’s future. After all, it was never supposed to be about paperwork, but about progress.
Mohamed Dafea, a chartered engineer and member of the Institution of Mechanical Engineers, is co-founder of UK tax and funding advisory firm Grantica.
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.