HM Revenue and Customs (HMRC) have launched a tool to check whether a project involves Research and Development (R&D) for tax purposes.
R&D tax reliefs support UK companies working on innovative projects in science and technology. For R&D tax reliefs to be available, a project must meet certain criteria. Only activity that meets the definition of R&D for tax purposes can qualify.
The tool will help companies that are new to R&D tax reliefs or that need additional support, and give HMRC's view on whether a project involves R&D for tax purposes based on the information provided. The tool will need to be completed based on the facts of each project.
Companies can use the tool to help them:
- understand the key concepts around qualifying R&D projects;
- check what information is needed before making a claim;
- check if a project involves R&D for tax purposes.
The tool has guidance links throughout. A competent professional will be needed to answer some of the questions in the tool.
HMRC say that, if the answers given are based on the facts of a project and can be clearly supported and explained, they are unlikely to disagree that it involves R&D activities.
HMRC also note that, if a project qualifies as R&D for tax purposes, it does not always mean that relief can be claimed on all R&D-related costs.
