Two things put work outside the relief: it does not seek an advance in the overall knowledge or capability of a field of science or technology, or its problems are ones a competent professional could readily resolve. Every exclusion below follows from one of those.
Routine work, however new it is to you
Paragraph 12 of the Guidelines is blunt: the routine analysis, copying or adaptation of an existing product, process, service or material will not be an advance in science or technology. Paragraph 22 adds the part companies dislike — that stays true even where the knowledge is completely new to the company or its trade. HMRC adds that such work cannot be a qualifying project however well planned and resource intensive.
The weight sits on “routine”. Paragraph 9(c) brings within R&D a project seeking an appreciable improvement to an existing process, material, device, product or service through scientific or technological changes, and paragraph 23 sets that bar at more than a minor or routine upgrading — something a competent professional would acknowledge as genuine and non-trivial. Adapting an existing product is not excluded. Adapting it routinely is.
Fields outside science and technology
Paragraph 15A puts work in the arts, humanities and social sciences, including economics, outside science for these purposes. Cosmetic and aesthetic qualities sit similarly under paragraph 42: not of themselves science or technology, so improving how a product looks or feels is not R&D by itself. It adds that applying science or technology to achieve a desired aesthetic effect can require an advance.
Mathematics is where much published advice is now wrong. Paragraph 15B treats mathematical advances in themselves as science, whether or not they are advances in representing the nature and behaviour of the physical and material universe. HMRC dates it to accounting periods beginning after 31 March 2023; anything still calling pure mathematics excluded is quoting the 2004 Guidelines, kept in HMRC’s manual for earlier periods.
Commercial innovation is not an advance
Paragraph 8 states that nothing becomes an advance simply because science or technology was used to create it: work which does not advance scientific or technological capability as a whole is not an advance. HMRC puts the trap in a sentence — innovation does not necessarily show that you are seeking an advance in science or technology. So a product first of its kind in your market but built from established technology fails, while a commercially dull project resolving a real technological uncertainty passes.
Problems your professionals could readily resolve
Paragraph 14 excludes uncertainties a competent professional in the field can readily resolve, together with improvements, optimisations and fine-tuning that do not materially affect the underlying science or technology. Paragraph 35 sets routine fault fixing against genuinely new problems emerging after a product goes into use, which can require fresh R&D; debugging usually falls the wrong side of that line. Hence the weight on who counts as a competent professional.
Work either side of the uncertainty
Paragraph 33 sets both ends: R&D begins when work to resolve the uncertainty starts and ends when it is resolved or work to resolve it ceases, so identifying requirements where no scientific or technological questions arise falls outside. Paragraph 34 closes the period when the knowledge is codified in a form usable by a competent professional, or a prototype with all the final product’s functional characteristics exists; paragraph 39 puts later work outside once that prototype has been retested satisfactorily.
The R&D project usually sits inside a wider commercial project, and most of that wider project is not R&D. Market research into what would appeal to buyers, a project’s financial, marketing and legal aspects, production and distribution appear in paragraphs 28 and 37 as activities that do not directly contribute, which paragraph 5 puts outside R&D. Paragraph 31 is the exception: administration, clerical, finance, personnel work and training do count when undertaken for R&D. Paragraph 32 closes that list, and a scheme’s own cost rules then govern what can be claimed.
Where to go next
Our guide to qualifying R&D holds the advance and uncertainty tests together, and what a scientific or technological uncertainty is takes the harder of the two further. If a project sits near one of these lines, settle it before a claim is prepared, not during a check: HMRC checked around one in six claims in 2023-24, its latest published figure. Send us the work and we will tell you which side of the line we think it falls on.
Sources
- Guidelines on the meaning of R&D for tax purposes — paragraph 8 on using science without advancing it; 9(c) and 23 on appreciable improvement; 12 and 22 on routine analysis, copying and adaptation; 14 on what a competent professional can readily resolve; 15A on the arts, humanities and social sciences; 15B on mathematical advances from April 2023; 28, 31, 32 and 37 on activities that do not directly contribute and the closed list of qualifying indirect activities; 33, 34, 35 and 39 on when R&D starts and ends; 42 on cosmetic and aesthetic effects.
- Help to see if your work qualifies as R&D for tax purposes (GfC3), part 4 — HMRC on innovation not showing an advance, routine adaptation in a well planned project, and mathematical advances qualifying for accounting periods beginning after 31 March 2023.
- CIRD81900 — the 2004 Guidelines text, which HMRC retains for accounting periods that began before 1 April 2023 and which carries the superseded position on mathematics.
- HMRC’s approach to R&D tax reliefs 2023 to 2024 — 9,700 compliance checks against around 61,000 claims received, the source of the one-in-six check rate.
This page describes the rules as they stood at the review date above, as general information rather than advice on your circumstances. For how that distinction works, see our terms; for an answer on your own facts, talk to us.