Does My Project Actually Qualify for R&D Tax Relief?
New. Innovative. Expensive. Difficult. None of these words mean what most business owners think they mean when it comes to R&D tax relief.
A project can tick every one of those boxes and still not qualify. That surprises people, and it's usually the first misconception we have to clear up before a useful conversation can even start.
What actually has to be true
Developing something completely new to your own business doesn't, on its own, establish qualifying R&D. What matters is narrower and more specific: what advancement in science or technology was being sought, what scientific or technological uncertainty stood in the way of it, and why a competent professional in that field couldn't have simply worked out the answer in advance.
Why we talk to the people who did the work
A director can usually tell us a project was hard, took nine months, and cost a lot of money. That's a start, but it's not the story that determines eligibility. The engineer, developer or technical lead can tell us what wasn't known at the outset, what was tried and discarded, what nearly didn't work, and how the problem actually got solved. That's a completely different conversation, and it's the one that matters. Commercial success doesn't prove R&D took place. A failed project doesn't disprove it.
Yes, failed projects can still qualify
R&D isn't judged by whether the final product worked out commercially. A genuine attempt to resolve a scientific or technological uncertainty is still R&D, even if the solution was ultimately abandoned. The reverse is just as true: a project that sold brilliantly doesn't automatically mean qualifying R&D was involved in building it.
Sometimes, the honest answer is no
We tell clients when we don't think a project, or a piece of expenditure, belongs in a claim. We've turned work away where we weren't satisfied the criteria were met. That's not us being cautious for the sake of it. It's the job. Our responsibility is to identify everything a client may legitimately be entitled to claim, and to protect them from anything we can't stand behind.