How the R&D Tax Credit Agent Works

The idea behind the process

A research credit claim is a chain. Each link depends on the one before: the evidence shows what the work was, the test decides whether it qualifies, the costs say how much was spent, the allocation ties people to projects, and the calculation turns all of that into a number on a form. If an early link is weak, every later one inherits the weakness. The agent is organized around that chain, so that each step produces something the next step can use and a reviewer can inspect.

Step by step, in more detail

Evidence capture is where most claims are won or lost. The agent watches the tools your team already uses and links each piece of activity to a project, so that nobody has to maintain a separate diary. Where the record is thin, for example a ticket that says "fix" with no explanation, the agent asks the person for one or two sentences about what they were trying to achieve and what was uncertain. Those short notes, written at the time, are often the most useful evidence a claim has.

Screening against the four-part test is a sorting aid. A routine bug fix and a prototype of a new algorithm look different against the test, and the agent explains why it tagged each one the way it did, so the reviewer can agree or disagree quickly. Nothing is treated as qualified until a person has confirmed it.

Cost capture is mostly plumbing. Payroll and accounting connections provide wage and payment data, and the agent codes it to projects according to rules you can see. Cloud costs and supplies are matched where the records allow. Allocation then ties time to cost. A manager can adjust a person's split with a reason, and the adjustment is kept.

The calculation and drafting steps are mechanical but need to be right. The agent works out the credit and the related research-cost treatment, and fills the forms and schedules. The reviewer can open any number and trace it back to the cost record and the evidence behind it.

What the reviewer sees

The reviewer receives a claim pack rather than a pile of attachments. For each project there is a summary of the work, the evidence behind it, the people and time allocated, the costs, the four-part test reasoning and any open questions flagged by the agent. The calculation sits beside it, and every figure links back to its source. The reviewer can approve, amend or reject each item. The decision and the changes are recorded, so that if a claim is questioned later there is a clear account of how it was built.

A worked example (illustrative)

The numbers here are invented. A small firm that makes industrial sensors has two engineers working on a new calibration method. Over the year the agent collects test logs, design documents and short notes. It tags the calibration experiments as likely qualified, with reasons about uncertainty and trial and error, and tags the routine documentation updates as unqualified. Payroll data provides the engineers' wages. A manager confirms that one engineer spent roughly half of the year on the project, and the agent records that split and the reason for it. The draft claim shows the qualified wages, the supply costs for test materials and the calculation. The reviewer disagrees with one tag, changes it and signs off the rest.

Limits

Each step depends on the information it is given, so a claim is only as good as the records behind it. The screening step cannot know facts that nobody has written down. The agent does not decide eligibility, and it does not guarantee that a claim will be accepted or that it will not be examined. It does not file returns. Those decisions belong to the people and providers who are qualified to make them.