R&D Tax Credits: Where does research and development begin and end?

You could be surprised to discover that R&D is embedded in the daily goings-on of your business. Absolutely any industry is entitled to claim back up to 33% of its R&D spend, and there doesn’t need to be an R&D department, scientist, or white lab coat in sight for your business to qualify. 

While most R&D projects have a start date and an end date, determining those can be challenging. Knowing when an R&D project begins and ends is crucial in capturing all costs and guaranteeing none go amiss. This knowledge is also vital in ensuring you’re not claiming expenses outside of R&D. 

Claiming for things you shouldn’t be could sour your relationship with HMRC — leading to time and cost consuming back and forths with tax inspectors. We make signing off your R&D tax credits claim an Easy one for them to make.

Thanks to our state-of-the-art Easy Portal, we capture your R&D activity in real-time — meaning we’re not looking back on information that could be months or even years old.

Typically, an R&D project goes through several phases: planning, research, development, testing, marketing, and rollout. Companies will call these phases different things, but the shape of an R&D project is pretty consistent. You can discount the marketing and release phases; creative thinking alone and marketing spending are excluded from the scheme.

R&D work starts when a technological or scientific uncertainty begins, which isn’t readily available or deducible by a competent professional in your field. This could be during the design phase of a project. R&D can be triggered by a problem encountered through a subsequent phase, where a technical or scientific solution is required.

The project ends when you overcome the uncertainty. Yet, your R&D project doesn’t even have to be successful to qualify for R&D tax credits. If it ends before you resolve the unknown, you can still claim for the costs incurred.

You might develop a service, product or process, and resolve all uncertainties, only to find that the final outcome doesn’t quite meet the specification. If the rework throws up more technical dilemmas, the R&D cycle starts again and the more you can claim back.

If you’re unsure where your R&D projects start and end, we can help. You can get in touch with us here.