Independent Tax Consultants

Head Office 01633 386017 Midlands 01562 829484

How Do I Qualify?

In order to qualify for R&D Tax Relief, there needs to be:
 
- A project
- An advance in science or technology
- A scientific or technological uncertainty
- Competent professionals
 
For more information, see below.


Project 

 

A project’s timeline can be long and far reaching from initial feasibility and market research through to actual development and then onto consumer testing. When looking at an R&D project we are focused only on the parts of the project that helps resolve the scientific or technological uncertainty.
 
R&D activity begins when work to resolve the uncertainty starts and finishes when the uncertainty is resolved, or work ceases due to you being unable to resolve it.
 
This is important as failed projects and tenders, where you may not actually carry out the work, are qualifying projects.


Advance in science or technology


An advances in science or technology can exist in any of the following:
 
  • A new process, material, device, product, or service;
  • An appreciable improvement to an existing process, material, device, product or service;
  • New scientific or technological knowledge or capability;
  • Using science or technology to duplicate an existing process, material, device, product or service.
 
Although advances must contribute to the overall knowledge of the field, it often relates to a company’s knowledge in the field. As whilst further or identical advancements may have already been made by other businesses, these are often trade secrets and not in the public domain.


Technological or scientific uncertainty

 
Scientific or technological uncertainty exists when it is not known
if something is:
 
  • Scientifically possible, or;
  • Technologically feasible, or;
  • Achievable in practice, (i.e. given the time, funding, and resource available).
 
Uncertainty will often exist where its believed something can be achieved but there’s uncertainty in how to achieve it or how to scale it or make it cost-effective. How to achieve an advance should not be readily deducible by a competent professional (see below).
 
System uncertainty can also exist where there is complexity of a system, rather than uncertainty surrounding individual components. This often seen in software and food projects where each component is fully understood, however there is uncertainty in how these will interact with each other or if one might adversely affect another.


Competent Professional 



A competent professional is the person(s) in each business who are knowledgeable on the industry standard methodologies, experienced via qualifications and/or practical experience and is best placed to qualify an R&D project.
 
It’s an advisor’s responsibility to explain R&D Tax to a competent professional so that they can then advise on which projects would  qualify under the regime.
 
The identification of the competent professional(s) is vital at the start of every claim process.
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