Are you identifying all qualifying R&D Tax Credit projects? – Tip 3

An optimised R&D tax credit claim relies on identifying those projects that qualify – if you don’t get this right then you won’t be able to claim the right amount of qualifying expenditure, it is as simple as that.

In recent blogs we covered difficult or failed projects and whether necessary adaptations to existing technology packages to make them work in your business environment have been included?

Another area to consider is whether you have included work to update legacy systems which was technologically uncertain as to the solution – even if these systems are outdated?

Work does not have to be cutting edge to count as R&D. It can be improving the performance of lower spec systems.

Is there any “engineering” type work you have undertaken that may not sound innovative, but which involved significant problem-solving in bringing different technologies together?

R&D requires resolving scientific or technological uncertainty. This often arises as to how to best integrate the operation of otherwise known technologies.

Considering many advisors expect their clients to identify the qualifying projects when they have little or no knowledge or understanding of the rule book, it is hardly surprising that areas such as the above get missed and valuable R&D tax credit refunds lost

The identification of R&D for claims is based on the definition set out in the BIS R&D Guidelines issued by Department for Business, Energy & Industrial Strategy.

This complicated rule base, sets out the basic concepts and the boundaries, gives examples, and defines R&D for tax purposes. But the words do not necessarily fit neatly to an actual R&D project in a business context- so they must be interpreted in the light of the facts on the ground.

This is a real skill – it’s where an advisor can be very helpful, correctly identifying the qualifying R&D projects, and their limits.

To ensure that we don’t overlook any qualifying projects, MSC R&D’s team of technical and financial experts drive the process – we ask our clients what ‘work’ they do first and then we drill down and establish where the qualifying R&D is, leaving no stone unturned in our search.

This way we get the optimum results for our R&D Tax Credit clients.