Recognise Technical Uncertainties and Maximise R&D Relief
It’s one of the most important parts of an R&D claim — decipher the ins and outs of technical uncertainties. Recognise how to identify technical uncertainties, what makes them necessary, how it impacts your eligibility and how to maximise your R&D tax credit claim.
In the world of R&D tax credits, being able to identify and present your technical uncertainty is essential. As the very basis of the relief, these uncertainties act as the initial qualifying criteria that will ultimately determine the success of a claim. But how can understanding it help you to maximise a claim?
Well we answer this important question and more, with this deep dive into technical uncertainties — what they are, how to navigate them, and how they act as the primary guideline for all R&D claims.
What is a Technical Uncertainty?
The concept of technical uncertainties may be vast, but in its definition they can be stringent. You see, a technical uncertainty arises when there is no clear path or solution to achieve a specific outcome in a project.
This represents a gap in knowledge or capability that must be addressed through innovative thinking and experimentation.
How to Identify Technical Uncertainties
In relation to R&D tax relief, HMRC has an even clearer definition in regards to technical uncertainties, wherein there is no clear path or solution that can be overcome by an expert individual in the field.
Essentially this means that in relation to R&D tax credits, a team is required to push the boundaries of existing knowledge in order to achieve the specified outcome — making identifying the technical uncertainties a necessity in order to identify where further investigation and research are required. By recognising and addressing these uncertainties, businesses can push the boundaries of knowledge and create groundbreaking solutions.
The following showcases how you may identify whether or not your research and development project meets the definition of a technical uncertainty, and therefore qualifies for R&D tax credits:
Verify that the project is focused on scientific or technological advancement
Evaluate existing solutions and knowledge
Determine whether a competent professional could individually provide a solution
Verify that research and development is necessary to overcoming establishing a solution
Confirm that the solution is technical based and not commercial
While these steps will help you to identify your technical uncertainties, speaking to a professional R&D tax credit specialist will help you to quickly confirm whether or not your project falls within the parameters of HMRC’s definition.
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Navigating Technical Uncertainties With Research and Development
By undergoing a research and development project with the aim of resolving a technical uncertainty, businesses are able to:
Explore new solutions
Experiment with designs
Produce test-stage prototypes
Build effective processes
This trial and error approach to advancement is what pushes the boundaries of science and technology, while allowing businesses to prove themselves ahead of the curve. It’s this kind of innovation that the R&D tax credits system supports.
3 Examples of Overcoming Technical Uncertainties
HMRC Guidelines for R&D Tax Credits
As HMRC requires that research and development projects aim to overcome technical uncertainties in science or technology, it stands to reason that businesses across a wide range of industries may be eligible for the tax relief.
Given the extent of the relief, it stands to reason that there are a range of stringent HMRC guidelines in place for claimants, to ensure authenticity throughout claims. In order to adhere to these guidelines, it’s recommended that claiming businesses do the following:
Identify qualifying activities These activities may include systematic investigations, trial and error, experimentation, and the development of new or improved processes, products, or services
Determine the R&D scheme(s) you qualify for Depending on the size of your business and what date your accounting year begins, your claim could fall under the SME scheme, RDEC or the merged scheme
Calculate qualifying costs This includes staff costs, materials, consumables, software, subcontracted R&D and a range of other costs incurred, the full list can be found here
By working your way through these three steps, you’ll be able to begin building a solid claim that adheres to eligibility criteria. For a full checklist on R&D tax credit eligibility, download our eBook.
Maximising R&D Claims With Accurate Documentation
The ultimate goal when submitting an R&D tax credit claim is to receive the maximum relief that the guidelines and policy allows. In order to do this, our specialists recommend that you keep updated and accurate documentation throughout the course of a research and development project.
By doing this, businesses are able to easily identify qualifying criteria, build an authentic project narrative, and locate the various challenges encountered throughout the project.
Final Thoughts
In conclusion, the identification of the technical uncertainties that sparked your research and development project is one of the most important aspects of an R&D claim.
Not only does it provide fuel for innovation, but the technical uncertainty acts as the very crux of your claim, helping to establish eligibility at the base of your claim.
While the steps involved in identifying technical uncertainties can feel a little complicated, you may simplify the process by consulting with an R&D tax credit specialist.
How Alexander Clifford Propels R&D Tax Credit Claims
The specialist team at Alexander Clifford are dedicated to simplifying the R&D claims process, and showcase this by their ability to identify your eligibility in the course of a phone call.
As leading R&D tax credit specialists, our team has helped to compile and submit over 2,400 claims on the behalf of clients. Their dedication to maximising claims is why our R&D services are rated 5-star.
And it’s also what makes Alexander Clifford your trusted choice for R&D tax credits.
Discover how to identify technical uncertainties in R&D claims, why they matter, and how to use them to maximize your R&D tax credits with e