7 Questions to Ask Yourself When Assessing your Project for R&D Tax Credits

  1. Is the project in the field of science or technology?

The R&D that has taken place must be in the field of science or technology as HMRC states there must be an advance in these areas for a project to qualify. However, science and technology come in various forms.

  1. Was there a start and end date to the project?

There must be specific start and end dates to a project as the R&D must take place over a period of time. It cannot simply be a sudden moment of understanding of a problem.

  1. Is my project trade related?

R&D must be carried out to extend an existing trade or to lead to another trade. The intention of the R&D project should be to improve what you provide to customers whether that be a product or service.

  1. Is there technological or scientific uncertainty?

Such uncertainty exists when an understanding of whether something is technologically feasible or scientifically possible is not currently obtainable or can be provided by a knowledgeable figure in the field. If a competent professional has, in the past, tried to overcome the uncertainty and succeeded but their solution is not public information, or they failed, then a technological uncertainty can still exist. These uncertainties must require some level of effort to overcome, not just quick deliberations between colleagues but thorough investigation and experimentation.

  1. How much did I spend on the R&D project?

Your firm should be spending at least £10,000 on expenses directly related to the R&D such as staffing costs, software used and materials.

  1. Is the work improving any process or product that is available on the market?

R&D does not have to be carried out with the intention of creating something new, it can be an improvement. If your project is aiming to enhance an existing product or process, for example producing gluten-free version of current products, then the project can still qualify for tax credits.

  1. Did the R&D take place within two years from the relevant Corporation Tax (CT) accounting period?

Projects can only date back to two years from your current CT accounting period. For example, if your financial year ended the 30 June 2019, projects that ended before 30 June 2017 cannot qualify.

How we can help

For R&D Tax Credits videos, ebooks, blogs and case studies to watch, read and listen visit our dedicated R&D Tax Credits Hub

If you have any more questions or feel like we can help you, contact us on 01292 388 031 or email our expert stephen@ammu.uk