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Ian GilroyMay-20 20213 min read

TPMA: A better way of handling R&D tax credits

The research & development (R&D) tax credit schemes were launched in 2000 to encourage innovation and increase the time, resource and money spent by UK companies on R&D activities. The credits are available to all companies, both SMEs and large, creating or enhancing products, processes or services - whether successful or not in their endeavours. 

Since the R&D tax credit schemes were launched, more than 300,000 claims have been made and £33.3bn in tax relief claimed. For many of these successful claims, the support of a specialist tax adviser or accountancy has been key. The expertise of these firms ensures the documents required are completed to match the requirements and the HMRC processes are adhered to. 

Where challenges may arise is in the transfer of money between the claimant, the adviser and HMRC. Whether a tax reduction or a cash payment, the advisory firm will usually invoice for their services upon the claim being approved or the money received. However, this process of payment can become disjointed between parties, requiring valuable time to be spent chasing fees. On rare occasions, in worst case scenarios, this can lead to write-offs and lost money.  For this, there is a solution: Third-Party Managed Accounts. 


What is a Third-Party Managed Account? 

Third-Party-Managed Accounts (TPMAs) aren’t a new solution, you might know them as ‘escrow accounts’ or ‘designated accounts’. Historically, they have been used for construction, property and corporate transactions where larger sums of money are held for longer periods of time. However, with improvements in technology, the applicability of this payment solution is widening across a broad scope of industries, including tax claims.  

New digital means of managing payments and conducting KYC and AML has meant that TPMA and escrow solutions can be delivered in a more cost-effective and user-friendly manner. Now, accounts can be set up quickly, at a lower cost and for higher volumes of transactions.  


The process:  

With Shieldpay, the tax credit is paid directly into the TPMA by HMRC. With this money received, the tax firm can then settle their fee immediately and send the funds to the claimant, improving cashflow considerably. 

TPMA providers may differ in the services offered as part of their solution. Shieldpay’s TPMA solution provides integrated KYC/AML services, payment acquiring services, ongoing transaction monitoring, bank account verification, payment settlement and financial statements through one complete digital platform. 


The advantages:  

Removes administrative burden – Using a TPMA removes the stress of managing payments – whether for the payment of the service to the firm or for the final transfer of tax credit to the claimant. The Shieldpay platform tracks and records all payments, providing all parties a clear audit trail for credit receipts and fees.  

Speed – With Shieldpay’s digital solution, accounts can be set up quickly and payments are tracked on the platform, reducing the time required to communicate between parties. The platform also enables instant payment authorisation to ensure money is transferred on time and when expected. The time saved from using our TPMA can go back to the business for more profitable activities, such as business development.  

Guaranteed payment – Managing transactions through a digital platform ensures all parties involved have full visibility of the scheduled payments which can aid in a smoother cashflow.  

Reduced risk - Although there is no specific regulation for R&D tax credit firms, registered accountancy firms will need to consider following their chosen accountancy body’s rules. While not a necessity of compliance, using Shieldpay is a safe payments solution with robust due diligence processes and full regulation from the FCA as a payments institution. Risk is also reduced for all parties as there is certainty of prompt payment.  

Enhanced client service - The added transparency of using Shieldpay helps build trust and increases responsiveness which can improve the relationship between firm and claimant. 


With the number and value of R&D tax claims continuing to grow year on year, there is a clear need to navigate the transactional processes quickly, efficiently and smoothly. A TPMA solves for this, ensuring all parties have peace of mind. 


Shieldpay's technology-led solution provides Third-Party Managed Accounts (TPMA), corporate escrow and paying agent services across the professional, financial and legal services industries. Get in touch to find out more.


Ian Gilroy

Sales Manager at Shieldpay