New Finance Director's First 90 Days at a UK Manufacturing or Engineering SME: The 10-Point Checklist

Quick answer: A new finance director's first three months at a manufacturing or engineering SME should include a structured review of live statutory deadlines, cash and working capital, banking covenants, R&D tax relief status, capital allowances, payroll compliance, insurance, key-risk concentration, financial controls, and a board reporting cadence, roughly in that order of urgency.

HMRC's most recent published statistics show the number of R&D tax credit claims fell 26% to 46,950 for the tax year 2023 to 2024, per the Research and Development Tax Credits Statistics release. Over the same period HMRC's own annual report records that the number of staff working on R&D compliance rose to over 500 in 2024 to 2025, up from around 100 in 2021 to 2022. That is the backdrop a new finance director at a UK manufacturing or engineering business is stepping into: a smaller, more heavily scrutinised claims population than the one most existing claim histories were built under. This checklist sets out ten things worth reviewing in the first three months, with R&D tax relief as one specific, time-limited item inside a wider financial-control audit, not the whole of it. It is written for the finance director doing the reviewing, not for a fellow tax specialist.

What should a new finance director review first?

Statutory deadlines and cash, in that order, because both carry the most immediate downside if something has already gone wrong before you arrived. Everything else on this list follows once those two areas are understood.

• Confirm every statutory deadline already in flight. The company tax return, statutory accounts, confirmation statement and VAT returns all have fixed filing dates that do not move because a new finance director has just started; know what is due, and when, before you own it [own-analysis].
• Review cash and working capital. Stock and work-in-progress valuation, debtor days and supplier payment terms are usually the fastest way to find out whether the numbers you have inherited reflect the real state of the business [own-analysis].
• Map banking facilities, covenants and headroom. Know what the covenant tests actually measure, and how close the business currently sits to them, before the next reporting date tests you on it [own-analysis].
• Audit the company's R&D tax relief position. See the next section. This is where a genuinely large, time-limited compliance and cash item sits for capital-intensive manufacturing and engineering businesses, and it is easy to inherit without a clear picture of what was claimed, under which scheme, or when the next deadline falls.
• Check capital allowances and plant and machinery claims are being fully used. A common gap alongside R&D relief in businesses that invest heavily in equipment and tooling [own-analysis].
• Review payroll compliance, pension auto-enrolment and PAYE settlement position. Inherited payroll errors tend to be slow-burning liabilities rather than one-off issues, so they are worth checking early rather than waiting for them to surface on their own [own-analysis].
• Assess insurance coverage against the current asset and liability profile. Cover set up for a smaller, or simply different, business than the one you have actually inherited is a common and easily missed gap [own-analysis].
• Review supplier and customer concentration risk and credit terms. Single-customer or single-supplier exposure is a common, and often underpriced, risk in mid-sized manufacturers and engineering firms [own-analysis].
• Map the finance team's controls and segregation of duties. Know who can authorise what, and why, before you are relying on those controls under pressure [own-analysis].
• Set a reporting cadence and KPI dashboard with the board. This is the output that proves the review actually happened, not just a to-do list that quietly stalls [own-analysis].

Why does R&D tax relief sit in the middle of this list, not at the top or the bottom?

Because it is a real, time-limited compliance and cash item, not because it is more urgent than statutory deadlines or cash. Deadlines and cash come first because they are the objectively higher-urgency, universally agreed priorities for any new finance director in any sector. R&D tax relief follows naturally as the next compliance and cash item once those are covered, particularly in capital-intensive manufacturing and engineering businesses where qualifying activity is common but easy to under-claim, over-claim, or simply lose track of across a change in personnel.

How should a new finance director audit the company's R&D tax relief position?

Four questions cover most of what matters in the first pass. Has the company claimed R&D tax relief before, and under which scheme? Does a claim notification need to be filed for the current period, a requirement that applies to first-time claimants and to companies whose last claim was made more than three years before the end of the notification window, within six months of the end of the relevant period of account, under HMRC's published guidance on the claim notification form? Does the company still qualify under the merged scheme or ERIS, which applies to accounting periods beginning on or after 1 April 2024, rather than the older SME or RDEC rules that earlier paperwork may still reference? And who is the named officer on the Additional Information Form, since that responsibility may now sit with the new finance director personally? Our free calculator gives an indicative eligibility and value range against the current rules in a few minutes, and our manufacturing and engineering sector pages set out the kinds of projects we most often see qualify in those industries specifically. Our complete R&D tax relief guide for a new finance director covers this audit in full, question by question.

What if the company has never claimed R&D tax relief at all?

Then the claim notification question above is the one that matters most, because a first-time claimant that misses the six-month notification deadline cannot make the claim for that period at all, regardless of the separate two-year amendment window that applies once a claim notification is already on file. If the company genuinely has never claimed and you believe it carries out qualifying work, checking notification timing is a first-week task, not a first-quarter one, given how unforgiving that particular deadline is.

What if the company has claimed before, under the old SME scheme?

Then the useful due-diligence question is whether the claim history would still hold up if reviewed today, not whether it was correct at the time it was filed. HMRC has more than quintupled the number of staff working on R&D compliance, from around 100 in 2021 to 2022 to over 500 in 2024 to 2025, which is a reasonable prompt to check an inherited claim's technical narrative and cost categories against current guidance rather than assume it is safe by default. Our guide to getting a second opinion on an R&D tax claim sets out how that kind of review works in practice, and what it can and cannot tell you.

How urgent is this, realistically, compared with the rest of the checklist?

It depends entirely on where the company sits against the two deadlines above. If a claim notification is due imminently, or the company has never claimed and may be eligible, this moves to the top of the list regardless of its position here. If the company has an established claim history and no notification is imminent, a considered review within the first quarter, alongside the rest of this checklist, is a reasonable pace. The point of listing it fourth is ordering by typical urgency, not by importance.

Want a written view on where your company's R&D tax relief position stands, no call required? Start with our free R&D tax relief calculator for an indicative range, then request a written review from there. Our sourcing standards are set out on our methodology page.