What does an Independent Accountant’s Report involve?

Got a grant from Innovate UK? There’s one more step to unlock your final payment

Once Innovate UK approves your project, they won’t release the final payment until you submit an Independent Accountant’s Report (IAR).

This isn’t just red tape. Innovate UK requires a formal compliance check, carried out by a registered auditor listed on the official audit register.

At A4G Audit, we’re registered with the ICAEW and experienced in supporting growing UK businesses through this process.

So, what exactly does an Independent Accountant do and why can’t your usual accountant handle it?

Why your normal accountant may not be able to handle the Independent Accountant’s Report

It’s not a tick-box exercise.

An IAR isn’t a basic report. It’s a structured compliance review that checks your costs meet Innovate UK’s strict rules. As your auditor, we don’t just confirm the totals, we test each element of your claim.

Here’s what we check:

• Eligibility of costs – Do the costs relate directly to the approved project and fit the grant rules?

• No profit included – Have you removed any margin from the figures?

• VAT excluded – Does your claim avoid recoverable VAT?

• Overhead calculations – Have you calculated overheads fairly and consistently using the agreed method?

• No double funding – Have you avoided claiming the same cost from multiple public sources?

• Supporting documentation – Can you back up each cost with invoices, contracts or payroll records?

• Timing – Do all costs fall within the approved project timeframe?

• Annexes 5, 6 and 7 – Have you completed these Innovate UK templates correctly and submitted them with the Statement of Expenditure?

Because of these detailed checks, you need an auditor who understands the process, works efficiently and knows what Innovate UK expects.

That’s where we add real value.

Our four step process for a smooth IAR

Step 1: Scope the Work

We start by understanding your project, the grant terms and the structure of your claim. Then we confirm the scope, provide a fixed quote, and agree on timing so everyone’s clear from the outset.

Step 2: Review the Documentation

We request the key information, including:

• Invoices and proof of spend

• Contracts and payroll data

• Overhead calculations

• Your completed Statement of Expenditure

• Any project tracking or milestone documents

We then check these against what you told Innovate UK. Everything needs to align.

Step 3: Test the Figures

Next, we run detailed tests. We ask:

• Do the costs meet Innovate UK’s eligibility criteria?

• Have you excluded recoverable VAT?

• Are overheads calculated consistently and reasonably?

• Did you accidentally include any ineligible or double-funded costs?

If we find any issues, we flag them early and help you fix them before they delay your claim.

Step 4: Report to Innovate UK

We finalise your Independent Accountant’s Report, complete annexes 5, 6 and 7, and prepare the Statement of Expenditure. If anything needs clarification, we’ll discuss it with you before submitting the final documents.

Mistakes we help you avoid

We’ve reviewed numerous Innovate UK grant claims, and we often spot the same problems:

• Claiming VAT or finance charges by mistake

• Using inconsistent or overly generous overhead rates

• Including costs that aren’t eligible

• Asking a non-registered accountant to prepare the report

We help you avoid these issues and submit your final claim with confidence.

Let’s get your Independent Accountant’s Report (IAR) sorted

If your Innovate UK project is nearing completion, we can guide you through the IAR process from start to finish. We’ll make it straightforward and make sure it gets approved.

Complete the form below to request your free quote.

Even if some of your costs don’t qualify for an Innovate UK grant, they may quality for enhanced tax relief under a Research and Development tax claim. Find out more about this valuable tax relief by reading our article on what qualifies and the reliefs available.