How technical should my narrative be to claim R&D tax credits?

Your narrative should be sufficiently technical to illustrate details and aspects of the work; but should be easily read and understood by a layman.

This may sound tricky, but the key is to not fill your narrative with tech jargon in the hope that they won't read the whole thing.

Things to make sure and cover in your R&D Tax Claim Narrative: Explain the fundamental innovation in a technical manner

Communicate the following about your project to HMRC:

Your project was a complex challenge ("Uncertainty"):

The work you claim on must be work which involves technological risk, failed iterations and moments of uncertainty as to which method and solution to use.

Your project was risky

It's important that HMRC understands that there was risk involved. While an investor might want to hear how awesome your team is, how you figured solutions out quickly and always get it right in the end, you know that tech development rarely works that way - HRMC wants to understand the complexities involved in your development and limitations on technology, including your solution.

Instances of failure, or scrapped iterations, or even failed R&D as a whole help immensely in illustrating this to HMRC.

Your project wasn’t obvious ("non-readily deducible")

The work you claim can’t have an obvious solution documented in Stack Overflow, Github or a blog. It has to involve work that goes beyond technology that exists as a standardised formula or code-base.

You should describe your process of iteration and the progression from one prototype to another. It’s always helpful to describe how the first iteration was not immediately successful (when is it?) and the multiple iterations you created to solve the problem.

Your project was technologically unique ("technological advancement"):

The process of iteration should have allowed you to achieve an element or method which was not obvious at the start, and that you solved by overcoming the challenges you encountered.

You will have to describe to HMRC what makes the system novel or non-standard in your overall field of technology.

This ties into the description of "Not Obvious" above.Describe your experience of failed R&D in terms of the advancement which was sought, even if it was not achieved successfully.

Your project considered competing technologies ("baseline/conventional solutions")Make sure to highlight the shortcomings or limitations of indirect or direct competitors that provide similar technologies to the project you’re developing.

This helps paint the picture of the challenges and limitations which make it necessary for you to do for your R&D project in the first place.

See other FAQs
Suggestion icon

We have made over a hundred million pounds in successful claims, always backed up by a fully researched technical narrative. Your claim for R&D tax credits will be judged in part on the narrative and we recommend you ask for help from our team of R&D consultants with a 100% success record in getting your claim paid.

F6S can help with your R&D claim