How do I know whether I’m carrying out R&D?

How do I know if I am carrying out R&D?

If you are developing a novel or improved product procedure or solution, your company might be conducting R&D. You will probably be trying to resolve a problem where no solution is evident. This can take many forms. And R&D projects can include efforts undertaken for a customer as well as your own company.

The government’s definition of R&D is intentionally wide. Whatever size or industry, if your business is taking a risk by attempting to ‘resolve scientific/technological uncertainties’ then you may be performing qualifying activity. This could include:

Developing novel products, procedures, or www.hamiltonwoodandco.co.uk solutions.

Modifying or modifying an current item, process, or solution to improve it.

This means that if you’re uncertain whether your project is scientifically or technologically feasible or you don’t know how to achieve it in practice, you might be addressing unknowns and therefore qualify for R&D tax relief.

Where does R&D begin and end?

R&D work begins when a initiative seeks an improvement in science or technology and concludes when the project’s uncertain aspects have been resolved. Any user-testing or commercial marketing work after overcoming the project’s uncertainties will not be R&D.

How can I tell if my initiatives are eligible for R&D tax credits?

For a initiative to qualify as R&D, you need to have set out to achieve an advance. That improvement must be in the field of science or technology, not just in your company’s own expertise. Your project can still be R&D if the improvement has already been achieved but the specifics are not readily available because for example they’re a confidential.

It’s important to remember that R&D is inevitably not always fruitful. If your project is ultimately unfruitful but sought a solution which was not evident at the outset, it could still be R&D.

What kind of initiatives do not are not eligible for R&D tax relief?

Generally, standard replication of current items, processes, substances, devices, or services will not usually be eligible as R&D. Efforts to improve the cosmetic or aesthetic qualities of a process, material, device, product, or service will not itself be R&D. However, work to create certain cosmetic or aesthetic effects through the use of tech can still qualify.

At Hamilton Wood & Company, our team includes not just certified tax consultants but also industry experts, attorneys, ex-HMRC officers and even a rocket scientist!

We use a continually-evolving process to prepare R&D tax relief applications that meet HMRC’s rigorous criteria – and maximize benefits for your company. If you’re not sure whether your work qualifies, we’re here to help.