Frequently Asked R&D TAX Questions

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HMRC has a very specific definition of R&D and you can read about it here. This is not the same as what many business owners think of as "R&D".

R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology through the resolution of scientific or technological uncertainty.

You can read HMRC’s full guidance on how to see if your work qualifies as Research and Development for tax purposes here.

Some businesses overlook R&D tax reliefs because they assume their work doesn’t align with the traditional image of “research and development” involving laboratories or scientists. In reality, the scheme isn’t limited to specific sectors or types of work and it can apply more broadly than many expect. While it’s not the case that most businesses will qualify, if you are seeking to address genuine scientific or technological uncertainties, it’s possible that your work could qualify for relief.

The tax legislation defines R&D as involving a project that seeks to achieve an advance in science or technology by resolving scientific or technological uncertainty. This means that it’s not about routine improvements or guesswork. It’s about genuine problem-solving where the outcome wasn’t obvious from the start, and situations where it’s uncertain whether a viable solution exists or how to achieve the desired outcome. It’s about pushing beyond standard practices when even the experts involved don’t know how to solve the challenges faced, when they begin.

Examples of things that might qualify:

• You aimed to develop or improve a product, process, or system by resolving specific scientific or technological uncertainties, rather than just delivering a new aesthetic feature.
• The project involved overcoming scientific or technological uncertainties that couldn’t be solved using existing knowledge or readily available solutions.
• Your experts had to experiment, prototype, or test different approaches to find a viable solution, where the outcome was uncertain, and no standard method was available to achieve the result.
• Tackling environmental challenges with new technological solutions in ways that resolved existing scientific or technological uncertainties.
• Developing new medical devices, drug formulations or diagnostic tools where success wasn’t guaranteed.
• Innovating in energy production or storage or improving efficiency in renewable energy systems, where existing methods were insufficient, and technological uncertainties had to be addressed.
• You developed new manufacturing processes aimed at improving efficiency, but where the technical feasibility or implementation method was initially uncertain, and the improvements sought were not trivial.

Examples of things that won’t qualify:

• Innovation with no attempt to resolve scientific or technological uncertainty. 
• Simple tweaks with no technical challenge.
• Cosmetic changes or aesthetic improvements.
• Using existing tools, technologies or methods without modification or advancement.
• Work where the solution was relatively straightforward or widely available – even if the development was time-consuming.

Remember that failed attempts to make an advance might still qualify. Even if the project didn’t succeed, the attempt to solve scientific or technological uncertainties may still be eligible. Speak to us at RD Reliance to find out more.

Not necessarily. In fact, in the majority of cases, the answer is no. Just because something uses technology, it does not make it R&D for tax purposes. HMRC has a specific definition that focuses on projects aiming to achieve an advance in science or technology by resolving scientific or technological uncertainty.

For a project to qualify, it must involve challenges that a specialist in this field couldn’t solve using existing knowledge or techniques. It’s not enough for work to be complex or unique - the key is whether it pushes the boundaries of current science or technology.

Simply using advanced technology or creating something bespoke doesn’t meet HMRC’s criteria if it doesn’t involve overcoming genuine scientific or technological uncertainties.

You can read HMRC’s full guidance on how to see if your work qualifies as Research and Development for tax purposes here.

Yes, we can. We can help you assess whether your project meets HMRC’s definition of R&D and guide you through the process of claiming R&D tax relief.

Contact us at team@rdreliance.com to arrange a discussion and find out if your work could qualify.