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R&D isn’t always R&D

14 Mar 2022

Research and development has been stated as being …..

“activities that companies undertake to innovate and introduce new products and services”

“when businesses gather knowledge to create new products or discover new ways to improve their existing products and services”

“two intimately related processes by which new products and new forms of old products are brought into being through technological innovation”

…and many other similar definitions.

Companies may be undertaking R&D as defined above but still not qualify for R&D tax relief, which can be very confusing for some of the companies we talk to.

In order to qualify for R&D tax relief, a company must be incurring a financial risk as it attempts to create an advance in a field of science or technology via the resolution of scientific or technological uncertainty, the outcome of which could not be readily deduced by a competent professional.

This is not the easiest explanation of R&D to digest and is the reason that a lot of ineligible claims are being submitted.  Unfortunately, most of these claims are not checked by HMRC so the claiming company is ignorant of the fact that they are not actually eligible for R&D tax relief.

If you have any questions on this blog or anything R&D related, please contact us at info@randdconsulting.co.uk.

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