Competent Professionals: Who Are They & Why Are They Important?

If you’re in the process of applying for R&D tax credits, you’ve likely come across the term ‘competent professional’. But who are they? Why are they important? And how do you know whether you have one on your team?

Today, we’ll be answering all of these questions to give you a comprehensive lowdown on the role of a competent professional, helping your business maximise its chances of a successful research and development claim.

 What is a competent professional?

A competent professional is defined as an internal or external worker with significant expertise within the field in which you’re carrying out your R&D project.

But how do you define ‘expertise’? Well, HMRC holds high standards for what qualifies. Competent professionals are required to have sufficient technical knowledge and insight to determine whether there’s a need for R&D and, if so, what specialist development is required.

According to HMRC’s official guidance, a competent professional should:

• Be knowledgeable about the relevant scientific and technological principles involved
• Be aware of the current state of knowledge
• Have accumulated experience and be recognised as having a successful track record

While there’s no specific qualification required to be considered a suitable competent professional, the level of technical expertise required will most likely have been acquired through university education or an extensive apprenticeship within the relevant field.

What is the role of a competent professional?

A competent professional is required to authenticate your R&D project by confirming that it involves qualifying activity and aims to tackle a satisfactory amount of “scientific uncertainty”. This ensures that any given R&D project is serving the greater purpose of the R&D Tax Credit Scheme: the growth and evolution of British industry through innovation.

This is where “scientific uncertainty” comes into play. Proving that your work aims to address scientific or technological uncertainties is the crux of any R&D claim. After all, if your project doesn’t set out to do this, it’s not contributing anything innovative.

A competent professional serves to validate these technical or scientific uncertainties within your project. HMRC defines these uncertainties as when “a project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty”.

Let’s break this down.

‘Uncertainty’ means that the outcome of your project shouldn’t be known from the offset. In fact, if it is, this means your project won’t be eligible for an R&D claim as the required knowledge or capability already exists. In the words of HMRC, this uncertainty is present whenever “knowledge of whether something is scientifically possible or technologically feasible, or how to achieve it in practice, is not readily available or deducible by a competent professional working in the field”.

The role of a competent professional is, therefore, to confirm a “gap in the field”. It’s important to note that this isn’t a gap in your internal knowledge across a single team, but rather a gap in the knowledge and capabilities of the wider industry itself. As HMRC states, “uncertainties that can readily be resolved by a competent professional working in the field are not scientific or technological uncertainties”.

The logic, then, is simple: if a competent professional doesn’t know how to move a project forward, the chances are that nobody else does either. This means that, without the necessary knowledge and capabilities being available within the public domain, the only way to find a solution is through - you guessed it - research and development.

Competent professionals in your claim

Remember: a project doesn’t have to be successful in order to be eligible for R&D tax relief. Providing your competent professional can corroborate that there was a valid attempt to overcome scientific or technical uncertainty, you may still qualify.

With this in mind, how do you record details of your competent professional and scientific or technical uncertainties in your R&D relief claim?

It’s best to include as much relevant information as possible about your competent professional within your application. This is best placed in your technical narrative, and will serve to add weight to your argument - evidence of their competence, experience and qualifications will go a long way here.

You should also look to position your competent professional as the leader of your development work where possible, identifying uncertainties and qualifying activity as a means of deciding where to place the focus of your development.

Characteristics of a competent professional

Different sectors will, of course, have different requirements with regards to their competent professionals. However, there are some core characteristics of an ideal competent professional regardless of your project or industry:

• sufficient experience within the relevant sector
• a proven track record of their competence
• up-to-date knowledge of the latest processes, innovations and events within the relevant field
• the ability to communicate technical concepts in a simple, concise and comprehensive manner

What are the risks in not involving a competent professional?

If you use an inexperienced or underqualified worker as your competent professional, there are a number of risks involved.

Firstly, this will make it a lot harder for you to adequately defend your R&D claim. From missed opportunities to misidentified eligibility, any lack of knowledge will be painfully evident in the weakness of your technical narrative. Moreover, a lack of a competent professional may mean you’re inaccurate in your uncertainty assessment, which could impact the overall eligibility of your claim.

Even in a best-case scenario, it’s likely your claim won’t check all of the boxes without a competent professional. It’s very clear, then, how important a competent professional is to your R&D claim.

From maximising your claim by spotting more opportunities and providing greater scope to improving the likelihood of acceptance through a strengthened technical narrative, a competent professional is integral to the success of your R&D project and your subsequent claim.

For further help in getting the very most out of your R&D claims, why not enlist the help of the professionals? Get in touch with Lumo today to learn more.