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Interview with an R&D Technical Consultant: Common Mistakes in Technical Reports

When claiming R&D tax relief, companies must submit a short description of their projects via the Additional Information Form (AIF) explaining how they meet the scheme's criteria.

Millie Palmer

Technical Analyst/Writer

01/07/2024

8 minute read


The AIF is a relatively new requirement – since August 2023 – but claims have included technical reports for a long time. This can be a minefield for the uninitiated, with drastic consequences if not done right.

After submitting the project to HMRC for review, caseworkers will assess the information provided to ensure the projects qualify. If they find the report lacking, they could open a compliance check, which requires the claiming company to spend much more time proving its eligibility or possibly owing back both the tax credit received and any penalties.

We sat down with one of our resident Technical Consultants for R&D tax claims to discuss the biggest pitfalls and how to avoid them. Millie Palmer works on full consultancy claims and claims made through our online R&D tax portal, Tax Cloud, and has significant experience in compliance checks.

What’s the biggest mistake you see regularly coming up?

To make a valid claim, you need to provide details on the advance you were trying to make, the uncertainties you faced trying to make it, the baseline in science and technology before you began your project and an explanation of how you tried to overcome the uncertainties.

The biggest mistake that always shows up is claimants not answering all the questions equally. Many clients are comfortable talking about what they wanted to achieve but feel less confident in the other sections. All four of these sections are equally important and require a certain depth and detail. It’s easy to wax lyrical about your innovation, but HMRC will look just as closely at the uncertainties and your attempts to overcome them.

Are there any other areas which need attention?

Other than the core sections, claimants should include details of their “competent professionals”. HMRC must know that your team can identify a valid uncertainty and advance in your respective field. Many claimants will put the CEO or other high-ranking personnel as the lead on the project. However, these may not be the most knowledgeable in the field.

For example, in software development claims, it would be far better to cite the developer actually working on the project than any executive, as they usually have the most experience in IT. C-suite personnel may be very comfortable with the commercial field, but their experience may be lacking when it comes to carrying out R&D.

Claimants should consider who has the most experience and qualifications related to the field where the R&D is being done. For a software project, a seasoned developer with a degree in computer science would work; for an engineering project, an engineer with additional professional qualifications and experience in similar projects would also be suitable.

How much background should claimants provide?

Generally, a short explanation of the project’s commercial goals is enough. It’s common to want to show how novel a project is to the market by showing that no competitors have a similar product. However, I liken this to an author writing a book; it might be new, it might be popular, with brand new characters and never-before-seen plot-lines, but if it’s printed with a printing press, there is no advance in science and technology nor is there any uncertainty about whether it would be possible to do.

Claimants should remember that claiming R&D tax relief is about proving that you have done something novel regarding the science and technology in your field. You should be able to describe your advance without mentioning the commercial market.

How much detail should claimants be going into?

Clients using Tax Cloud will know we have a character limit to guide the writing process. With a 1,000-character limit on most sections, it should be possible to fully explain the R&D without writing pages upon pages. However, claimants should also be wary of writing too little, especially when describing the work done in the period. You should aim to include details about the tools and technologies used, the general steps taken in the year to overcome your uncertainties, some specific examples of hurdles faced, and your attempts to overcome them. The narrative must be expanded enough to clarify what you’ve been doing throughout the accounting period.

Any final suggestions for potential claimants?

Too many claimants think this is a quick, done-in-a-day process. Writing your report and gathering your costs can take weeks, even months, especially when handling large claims with multiple projects. Using consultants or online portals will reduce the load and make the process easier, but you can still expect to go back and forth multiple times before being able to submit your claim.

The deadline to make an R&D tax claim is two years after the accounting period ends. For example, for an accounting period ending 31st December 2023, the company can submit their claim up until 31st December 2025. While this long period allows you to find time to make the claim that suits you, be careful not to leave it too late. It becomes much harder to write a convincing report when you’re trying to remember what you even did two years ago, let alone if there have been staff changes. We always recommend starting as soon as possible and, if not, taking notes while completing the R&D that you can look back on later.

How Myriad can help you claim R&D tax credits

If you need additional advice on writing your technical report or would like to explore options for streamlining the process, please call 0207 118 6045 or contact us via our Contact Page.

We have been helping clients in all industries claim R&D tax credits for over 21 years. We understand the complexities surrounding submitting R&D tax credit applications and know exactly how to get you the maximum amount of R&D tax credits possible.

Firstly, our expert team of friendly R&D tax specialists will sit down with you and identify all costs that might be eligible for R&D tax credits. We then compile a detailed report explaining your R&D work and justifying your expenditure and submit it for review. Because we’ve been in the industry for so many years, we have developed strong relationships with HMRC.

Take a look at our R&D Tax Credits page for more information about how R&D tax credits could benefit your company. Then, when you’re ready to make a claim, drop us a message or call us on 0207 118 6045 to start the process.


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