Definition
Vouching is the auditing-style process of tracing the figures in an R&D tax relief claim back to the underlying source records. Staff costs are vouched to payroll reports, time data and HR records. Subcontractor and EPW costs are vouched to invoices, contracts and payment records. Consumables and cloud costs are vouched to supplier ledgers and apportionment evidence. Vouching gives the claimant and its agent reasonable assurance that the claim is accurate and would withstand HMRC scrutiny on enquiry.
How HMRC defines it
Although vouching is not a statutory term, HMRC's Guidelines for Compliance GfC3 and the Agent Standard together create an implicit expectation that agents will perform this kind of check. HMRC's R&D enquiry procedure often requests a reconciliation of claim figures to the company's trial balance and payroll, which is effectively a vouching exercise performed by the department.
Practical example
During claim preparation, the adviser selects 20 members of staff at random and traces their claimed qualifying time back to timesheets or project records, and their salary figures back to payroll. The vouching identifies two cases where allocations were overstated. The claim is corrected before submission, removing £18,000 of qualifying cost that was not supportable.