Updated July 2025

When it comes to claiming Research & Development (R&D) tax relief in the UK, thorough and accurate documentation can make all the difference between a smooth, successful claim and a rejected or delayed one.

HMRC has become increasingly rigorous in its reviews, placing greater emphasis on the quality and clarity of supporting evidence and not shying away from compliance checks where it seems like a claim is missing these details. Whether you're a startup experimenting with new technologies or a mature company improving existing processes, how you track and present your R&D efforts is crucial.

We’ll explore the best practices for documenting your R&D activities – what HMRC expects, how to keep records efficiently, and the common pitfalls to avoid. With the right approach, you can reduce audit risks, streamline the claim preparation process and ensure your innovation efforts get the recognition (and relief) they deserve.

Why Documentation Matters More Than Ever

HMRC's approach to R&D claims has evolved. Where once the system relied on relatively straightforward forms, it now demands comprehensive reports that demonstrate not just what you did, but how it qualifies as genuine R&D under tax legislation.

For your claim to be eligible, you need to submit an Additional Information Form (AIF) with your claim. This includes basic project details, a description of your R&D work and how it meets HMRC’s guidelines, and some analysis of the costs you incurred.

This increased scrutiny isn't arbitrary. With R&D claims reaching record levels, HMRC has implemented more rigorous review processes, including detailed technical examinations and post-submission compliance checks. They're looking for clear evidence that your activities involved genuine technological uncertainty, systematic investigation, and advancement of knowledge.

Poor documentation can lead to:

• Significant delays in claim preparation timelines
• Reduced claim values when activities can't be properly evidenced
• Penalties and interest on incorrectly claimed amounts

Your documentation serves as the bridge between your innovative work and HMRC's understanding of why it qualifies for relief. It’s also essential to preparing your narrative swiftly and in sufficient depth.

Many companies find preparing the claim an arduous process, worsened when left until the R&D tax credit deadline. Imagine how much worse this is when relying on spotty memory and scarce records!

Documentation and Record-Keeping

Keeping thorough records during the R&D project is extremely important. HMRC requires companies to have evidence of their R&D available and they may request it in the event of a compliance check. But it’s also necessary to help your prepare an AIF detailing your R&D work.

Understanding HMRC's perspective is crucial for effective documentation. They're not looking for academic research papers or marketing materials – they want evidence that demonstrates the key tests for R&D relief:

1. Advance in science or technology – How does your work extend current knowledge or capabilities in the field?
2. Technological uncertainty – What didn't you know at the outset of the project?
3. Systematic investigation – How did you approach solving the problem?

It’s worth mentioning that HMRC doesn’t tell companies exactly what documents to use because each company works differently and does R&D in their own way.

Best Practices for R&D Documentation

For each R&D project, you should try to get a minimum of documentation in one space for your own claim preparation and for HMRC if ever requested.

You’ll need evidence for your R&D activities and for the eligible costs you claim for the project.

Keep Real-Time Records

The most powerful documentation is created during your R&D activities, not after them. Contemporaneous records carry more weight with HMRC because they reflect genuine decision-making processes and technical challenges as they occurred.

Why real-time documentation matters:

• Captures the actual uncertainty you faced at each stage
• Records decision-making rationale while it's fresh
• Demonstrates systematic approach to problem-solving
• Provides authentic evidence of technical progression

Practical tools for real-time recording:

• Project management software (Jira, Trello, Monday.com) with detailed task descriptions
• Version control systems (Git, SVN) with meaningful commit messages
• Laboratory notebooks for physical R&D activities
• Weekly team check-ins documented with technical progress notes
• Decision logs capturing why certain approaches were chosen or abandoned

The key is making documentation a natural part of your R&D workflow, not an additional burden. When team members understand that their technical notes might support future tax claims, they're more likely to record meaningful detail.

Track Project Activities Clearly

HMRC needs to understand exactly what constitutes your R&D project and what activities fall within its scope. Vague descriptions like "software development" or "product improvement" won't suffice.

Step one is always identifying when a project began and ended (if it has even ended). You can largely tell it’s begun once you start trying to solve a scientific or technological problem.

From there, you should try to outline the development process at a high level, including examples of failed attempts and other uncertainties that were thrown up through your development.

HMRC recognises that R&D projects often evolve. Document how objectives changed based on discoveries, as this demonstrates genuine investigation rather than routine development.

Log Financial Information Early

Financial documentation often becomes a scramble at claim time, but early organisation saves significant effort and reduces errors. The goal is creating clear links between costs and R&D activities.

Having clear documentation for all your costs incurred in the accounting period is essential in the event of a compliance check; HMRC often asks for proof that all costs were paid. You’ll need to demonstrate evidence for every cost item that you claim. This means timesheets and payroll data for staff, contracting agreements for subcontractors, and invoices for software licenses, consumables and any other costs.

Any apportionments (and there should be apportionments!) need evidence and clear explanation. 

Capture Staff Involvement

Your staff costs are often your largest R&D cost, making staff involvement documentation critical for a valid claim. But it's not just about hours worked – you need to demonstrate that time was spent on qualifying R&D activities.

The best case is detailed timesheets that specifically demonstrate the R&D activities that each staff member carried out. We always recommend companies try to implement a timesheet solution, especially across larger teams where estimates may lose accuracy.

However, timesheets are not the only option; HMRC recognises that some companies may not be able to implement contemporaneous time tracking solutions. Estimated apportionments are also accepted, alongside role descriptions and team member qualifications. You’ll need to show why you made any estimate and prove that your method was “just and reasonable”.

Remember, you can only claim for time spent on qualifying R&D; some staff may work on the larger project, but not contribute to the R&D aspect of a project (e.g., the marketing team providing insight on how to make a product more desirable). These activities should not be included.

Working with Specialist Advisors

Working with a specialist R&D tax advisor can greatly improve your chances of successfully claiming R&D tax credits. Myriad’s team includes several technical writers with extensive experience and a diverse technological background.

Here’s how the process works:

1. Information Gathering: Our technical writers collaborate closely with your team to collect detailed information about your R&D projects. They evaluate whether these projects meet the HMRC guidelines and begin preparing a report describing these activities.
2. Explaining Technological Advancements: Our technical consultants excel at explaining the technological advancements achieved in your projects. They present this information effectively, showcasing the innovative strides you’ve made in your R&D work.
3. Ensuring Accuracy: Our technical writers then send the report back to your team to make sure it’s faithful to the work you actually did. You have the opportunity to response to any questions or add in any extra details before it’s submitted to HMRC.

The end result is a strong technical report created by our technical writers. It includes all the critical information necessary for a successful R&D tax credit claim, including all the details needed in the AIF.

Specialist advisors will also check that your costs are accurately claimed and base their analysis off the proof you send across, so only eligible costs are included.

Final Thoughts

Effective R&D documentation isn't about creating perfect records – it's about building authentic evidence that demonstrates your genuine technological investigation. When you treat documentation as a strategic part of your R&D process rather than an administrative afterthought, you create a foundation that supports not just tax relief claims, but better project management and knowledge retention.

Key takeaways for immediate action:

• Start documenting today – Don't wait until claim time
• Keep it real-time – Contemporaneous records carry more weight
• Link everything – Connect technical work to staff time to financial costs
• Review regularly – Ensure your documentation stays current and complete

Free Resources: Need Help with Your R&D Documentation?

Keeping accurate records of your R&D activities is crucial for a successful R&D tax credit claim, but it can be challenging to organise everything correctly. We’ve developed two free resources to make the process easier:

• Schedule of Qualifying Projects Template– Use this structured template to evaluate each project’s eligibility, ensuring you capture all critical details.
• R&D Activities Boundary Diagram– A visual guide to help you understand the boundaries of claimable activities within your R&D projects, reducing the chance of overlooking essential information.

Download our free tools here and get started on your claim with confidence.

The businesses that succeed with R&D tax relief treat documentation as an investment in their innovation process. They understand that proper records don't just support tax claims – they help teams learn from experiments, avoid repeating mistakes, and build on previous discoveries.

Contact us today to discuss how we can help you maximise your R&D tax relief through better documentation and strategic claim preparation. Your innovation deserves the full recognition and financial benefit that proper R&D tax relief can provide.