For an R&D claim to be successful you need to be able to prove you sought an advance in science or technology. The advance must be to the field of science or technology, and not just an advance in your company’s knowledge. The exact definitions from the relevant legislation are:
- “An advance in science or technology means an advance in overall knowledge or capability in a field of science or technology (not a company’s own state of knowledge or capability alone).”
- “Overall knowledge or capability in a field of science or technology means the knowledge or capability in the field which is publicly available or is readily deducible from the publicly available knowledge or capability by a competent professional working in the field.”
The R&D scheme doesn’t specify what industries can claim R&D tax relief.
Science is defined as the understanding of the physical and material universe. Work in the arts, humanities and social sciences, including economics, is not science for the purposes of R&D tax relief. Science is looking to take a systematic approach to discovery, using experimentation, data collection and analysis to validate findings. Work to advance science alone can advance R&D.
Technology is the practical application of scientific principles and knowledge. A project involving technology doesn’t need to advance the underlying scientific knowledge but does need to advance the practical application of scientific knowledge.
As of accounting periods after 31st March 2023 it is possible to claim for mathematical advances.