There is no doubt that gun with quality loads and MR 5R barrel should be under .5 quite easily IF it was put together right.
Think it is pretty safe to say something is wrong with the gun or the scope in all probability.
1. Change scopes with a quality scope that shoots good on another gun. Might be scope problem.
2. Check bases and rings to make sure that they are tight and screws are not coming through rcvr. many times a base was not tightened down or forgot to tighten the rings. Check action screws for correct tension.
3. Buy a box of Federal match or Black Hills reloads. Both will shoot under 1" normally, and use them for testing.
4. A gunsmith that puts together a custom rifle
and then says that sub 1" is asking too much makes me suspicious of his workmanship.
5. Have someone else who you know can shoot .5 or better groups shoot it off a good rest or bags to confirm that it is not "headspacing" of the operator.
6. After all that take it to another known quality 1k, br or tactical smith that can go through it and find out what is wrong. chamber might be offcenter for example. Have seen them .020 out.