How should R&D Tax Credit advisors market themselves in 2024?

12 essential tips for R&D Tax Credit marketers

For many years, R&D Tax Credit marketers were fond of telling anyone who would listen that R&D Tax Credits were “not just for men in white lab coats”.

The obvious aim for some R&D advisors was to keep expanding the market for R&D Tax Credit claims to the outermost reaches of plausibility whilst praying that HMRC would remain asleep at the wheel and that the Treasury would fail to notice that upwards of ￡8 billion of taxpayer’s money was evaporating right under their noses.

This fantasy came to an abrupt end in 2022 when The Times newspaper published its bombshell expose of bogus R&D Tax Credit claims that had been paid out by HMRC, leading the Treasury to finally, and belatedly, take action.

What happened next has been well-documented - by me and others - so I won’t revisit the chaos that has resulted from HMRC’s compliance campaign or the Treasury’s inept handling of the R&D rate reductions, both of which have made the UK a laughing stock amongst international investors.

One side effect of the changes to the R&D regime has been to alter how R&D Tax Credit advisors market their services.

Bullish statements such as “95% of eligible companies don’t claim R&D Tax Credits”, “maximise your claim value”, “100% success rate”, “we can find more R&D costs than your accountant” and “we only need 15 minutes of your time to prepare your claim” were largely ditched and replaced by less exciting but more insightful pieces such as “how to avoid an HMRC enquiry”.

Successful R&D Tax Credit marketing in 2024 is all about demonstrating the deep expertise and credibility of your firm.

Despite this obvious shift in emphasis, there are a surprising number of holdouts who don’t seem to have got the memo that the days when the Treasury was absurdly declared to be in possession of an ￡84 billion pot of unclaimed R&D Tax Credits are over.

In no particular order, I focus on 12 problem areas where I believe R&D Tax Credit marketing can go awry and I have made some suggestions on how R&D advisors can make changes and improvements to their messaging. ?

1. Ditch your online “R&D Tax Credit Calculator”

As I wrote in a 2022 article (here) , these antiquated relics were never a good idea but in 2024 they are completely redundant.

The original (and now obsolete) purpose of these tools was as a zero-cost, rough-and-ready qualifying mechanism solely for the benefit of the advisor. Unsurprisingly, prospects today don’t like to feel they are being qualified.

Most potential claimants are now aware that the process of preparing an R&D claim is much harder and more complex than before so they will struggle to accept that a simplistic online tool can assess the validity of a claim and produce a realistic estimate of a claim benefit before they have spoken with an expert to explain their particular circumstances.

This feeble attempt to qualify prospects looks more ridiculous than ever in 2024. There may even be a valid case for HMRC to warn advisors against their use as part of its crackdown on false advertising.

Any R&D advisor using them today is inviting ridicule.

2. Don’t boast about your massive growth

Everyone knows that rapid growth can be operationally disruptive in a service industry so who is going to trust the quality of an R&D advisor that shouts about how it has doubled or even tripled its client base in a single year?

You may argue that it proves that clients are flocking to your vastly superior offering however your competitors will also notice your boasts of enormous growth and they will not lose an opportunity to use it against you in a competitive situation.

3. Be careful when choosing your case studies

I wrote an article last year (here) detailing how the Head of HMRC, Jim Harra, has described R&D Tax Credits as “a honeypot for whom it is not intended and an industry has grown up around tax advisors helping people to make claims that are not compliant”.

Why then would an advisor promote case studies describing how they managed to claim vast amounts of money for companies in oddball sectors not normally associated with R&D?

Examples include one advisor that inexplicably promoted R&D Tax Credits for Care Homes on its website and suggested that some highly implausible “R&D” activities could qualify:

4. Avoid sounding like an amateur

As with case studies (above), the use of juvenile phrases such as “R&D stands for Research and Development” will just attract the wrong sort of prospect.

This might have worked 15 years ago when R&D Tax Credits were less widely known but in 2024 prospects are fully aware that preparing an R&D Tax Credit claim requires deep expertise so they will give a wide berth to advisors that appear to be novices in the R&D advisory field.

5. Get rid of your Sales Development Representatives (SDRs)

Long gone are the days when inexperienced R&D salespeople could hang around their company’s stand at a trade show hoping that their dream customer would just happen to walk past and start a conversation or that a random cold call would magically find a company doing large amounts of R&D that by some miracle had never heard of R&D Tax Credits.

There is no room for cold outbound prospecting by SDRs in today’s R&D Tax Credit environment. These roles are redundant.

Not only are they wholly ineffective, they can also make you look like the type of rogue R&D agent that HMRC is accusing of encouraging ineligible companies to make R&D claims.

Novice SDRs are incompatible with R&D Tax Credits. Salespeople should be expert consultants first and foremost.

This view is borne out by a LinkedIn poll I conducted a few weeks ago. The results were unequivocal: 86% of respondents indicated that they wanted to talk to R&D Tax Credit experts compared with only 2% who said they didn’t care who they spoke with:

“Spray-and-pray” pitch-slapping messages on LinkedIn don’t work either. This should now be obvious to everyone so my advice to any SDRs still doing it to stop as it is wholly counterproductive.

6. Don’t fib about your firm’s credentials

This is an obvious one but I find some R&D advisors persist in saying they have expertise that they don’t really have, for example that their staff are Chartered Tax Advisors.?

Prospective clients can easily discover the truth in seconds by glancing at your company LinkedIn page.

Rufus’s Top Tip: One thing I always try to do myself is to give prospects the names and profiles of the team members that will be directly working on their R&D claim during the sales discussions. ?

I have often used this to my advantage in a competitive situation where my rivals have preferred to gloss over who would be actually working on their claim.

On a related note, LinkedIn also allows prospects to see the composition of an advisor’s entire team broken down by functional role.

The chart below relates to an R&D advisory firm with 67 employees, the vast majority of whom are in business development or sales roles. This would be a concern to anyone considering an engagement with this firm as there would be grave doubts about their technical competency to both prepare a claim and to handle an HMRC enquiry.

7. Don’t say you can complete an entire R&D claim from start to finish "in a few days”

In a tough HMRC compliance environment, talking about your quick claim preparation process could make you look slapdash and prospects could worry about your quality assurance processes.

The most important consideration is that an R&D claim is correct and that it stands up to HMRC scrutiny, not that you can rush through the process in a few days.

In any case, I would proceed with extreme caution with any prospect that is so desperate for cash that they need you to complete their R&D claim in a few days.

8. Avoid boastful marketing statements that don’t add value or offer anything new

R&D claimants crave valuable insights and want to learn something relevant to their business that they didn’t know before.

This is where informative content can set you apart from the type of R&D advisor whose marketing consists mainly of shouting from the rooftops that they have just “signed a new client that had already been turned away by their accountant and/or another R&D advisor" (which is incidentally a rather silly thing to say in 2024).

9. Don't do paid advertising on consumer-focussed social media platforms

It is hard to conceive of any circumstances where advertising on Facebook would attract the right sort of client to your R&D advisory business.

It will shred your reputation and place you firmly in the ambulance-chasing category.

Word will soon get round the R&D advisor community (who believe it or not all talk to one another) and you will become discredited with the added risk that you may find it difficult to recruit people from within the industry.

10. Beware of claiming to provide “full coverage in the event of an HMRC enquiry”

This is very easy to say but the problem is defining what it actually means. Prospective claimants are increasingly probing R&D advisors to identify exactly what expertise and success they have in defending HMRC enquiries.

Firing off templated letters to HMRC does not constitute defending an HMRC enquiry so prepare to be challenged by prospects on how successful your track record is.

Your competitors with the relevant ex-HMRC expertise will be quick to exploit any weakness in your armoury so make sure you actually do have the capability to effectively handle an HMRC enquiry (if you say you do).

11. Don’t be tempted by Trustpilot

The online review platform Trustpilot is primarily focused towards reviews by consumers so professional R&D advisors are seriously damaging their credibility by being active on the platform.

Many people are also aware that Trustpilot is open to manipulation by allowing “invited reviews” which score an average of 4.57 compared with 2.87 for organic (uninvited) reviews.

This indicates that the type of invited reviews which are solicited by R&D Tax Credit advisors are wholly unreliable.

Most business buyers are savvy enough to recognise these issues and will avoid R&D advisors which attempt to create a falsely positive picture of the company through what may well be misleading reviews on a consumer platform.

There is also the danger that negative reviews will slip through the net. Whilst you may be able to remove a negative review in a few days, I guarantee that your competitors will have already taken the opportunity to screen-shot it to use to damage your reputation.

12. Be careful not to promote "low fees" as a client benefit

Avoid making desperate-sounding marketing statements such as “low fee regardless of claim size”. ?

This is an insane hostage to fortune as it takes no account of the potential complexity of a claim and the possibility that you may need to deploy significant extra resources to prepare some claims.

Additionally, I have found over the years that claimants looking for low fees above other considerations tend to be at the more troublesome end of the spectrum.

It is a mystery to me why any R&D advisor would deliberately set out to attract clients who are primarily focused on obtaining the lowest fee.

Conclusion

With the R&D Tax Credit advisory industry in turmoil, an entirely new approach to sales and marketing is required.

R&D Tax Credit marketing in 2024 is all about demonstrating credibility and quality.?

A common thread in all 12 of the areas I discuss is that they offer no real value to the prospect.

R&D claimants are looking for deep expertise from a trusted advisor, not spammy messages from an inexperienced pitch-slapping salesperson backed by PPI-style marketing.

Many readers may quibble with some of my reasoning. Some will say “why worry, it’s just marketing?”

My answer is that yes of course it’s just marketing but your competitors are already using your cringey marketing against you in competitive situations. You are losing business, or at the very least you are attracting the low value, difficult type of client that other advisors are more than happy to let you have.

I’ve spoken with dozens of other R&D advisors who agree with me.?For example, Vicky Kwenda , an R&D Tax Credit Specialist at R&D Consulting told me that:

“R&D Tax Credits have been plagued with poor quality and dishonest marketing for years.? The same tired approaches have been used again and again, copied each time a new player steps into the market.?

“Some which may have been relevant years ago are now inappropriate and at odds with the very different landscape that has emerged over the last couple of years. Some should never have been used in the first place and are at best misleading and worst completely fabricated.

“Better marketing is a good start but it doesn’t stop there.? Preparing robust R&D claims isn’t quick and easy and anyone that isn’t willing or capable of doing this should not be advertising an R&D service at all”

I hope that my suggestions are useful and as usual I’d love to hear what other advisors think.

Article written by Rufus Meakin

Rufus Meakin is a leading expert in the field of R&D Tax Credit sales and marketing.

With 20 years’ experience in selling both innovation grant funding and R&D Tax Credits, he has conducted over 3,500 face-to-face board level sales meetings which have led to over 800 clients claiming nearly ￡400m in combined innovation grants and R&D Tax Credits.

With over 2,600 subscribers, his influential R&D Tax Credit Insider newsletter is recognised as having been instrumental in bringing the major R&D Tax Credit compliance problems to wider attention, including in HM Treasury and the national media.

If you would like to discuss R&D Tax Credit referral partnership opportunities then please feel free to call on 0794 110 3285.

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