Does my project qualify for R&D Tax relief?

1. Is your project in the field of science and technology?

HMRC states there must be an advance in science or technology for a project to qualify. However, it’s worth remembering that science and technology comes in various forms. HMRC guidelines include hard sciences such as engineering, biotech, chemistry, physics and computer science.  Social sciences do not qualify.  Consider what scientific or technological advance is being sought.  If your project has achieved a technical feat, then it’s likely to qualify.  In some cases it’s not so easy to give a clear cut answer and it will depend on a number of factors, particularly how your project is presented.

2. Did you encounter scientific or technological uncertainties?

If project had a certain outcome at the start it’s not R&D.  The project must be uncertain due to technical reasons and not due to your own lack of experience in the field.  If you weren’t sure if it could be built to the required specification or what it might look like once it was built then this is likely to be a scientific or technological uncertainty.  When presenting your project to HMRC you will need to report how the uncertainties were overcome by describing your successes and failures and how they impacted the project overall.  Even if the project fails, the activities may still qualify as R&D.

3. Are the people leading your project competent professionals working in the field?

In your presentation to HMRC you will need to outline their professional qualifications and experience. Get them to explain why they consider the uncertainties to be scientific or technological rather than routine.

4. Is the work you are doing improving any process or product that is available?

  R&D doesn’t necessarily have to be something new, it can be an improvement.

5. Did your project take place within 2 years from relevant Corporation Tax accounting period?

Projects can only date back two years e.g. if your financial year ended on 31^st December 2016, projects that ended before 31^st December 2014 cannot qualify.

If you would like to discuss any of these criteria and how they might apply to work you have done or are doing right now please get in touch.