Competent Professionals

Part of the requirement for an R&D tax relief claim is to name a competent professional in your field. This is someone who can judge if a scientific or technical advance is needed to solve a problem. HMRC expects the competent professional to be able to:

  • Judge what is and isn’t an advance based on the current state of what is known and understood
  • Identify the projects that contain R&D; including when they start and end

Competent professionals must be shown to be qualified and experienced in the relevant field. HMRC expects the named individual to:

  • Be knowledgeable about the relevant scientific and technical principles involved
  • Aware of the current state of the field as a whole
  • Have experience and a proven track record in the necessary field

There is no requirement for the named individual to work at your company but they usually are directly involved in the project.

HMRC’s 14 step process for the competent professional within a project

In October 2023 HMRC published its first-ever specific guidance about record keeping for R&D tax relief claims, see HMRC guidance for a competent professional.

Before you make any claim for R&D expenditure, HMRC expects you to have taken the following steps.

  1. Identify projects that sought to create new knowledge or capability
  2. Confirm that these projects relate to a qualifying field of science or technology, and briefly explain how each project is a part of the identified field
  3. Name the exact uncertainties the projects were seeking to resolve
  4. Explain why the answer to each uncertainty was not readily deducible
  5. Briefly set out both:
    • the state of relevant knowledge in the field
    • why resolving these uncertainties would represent an advance in the field at the time the work was undertaken
  6. Confirm that these projects sought to advance the knowledge of the field as a whole, not just the knowledge or ability of your company
  7. Identify exactly where each uncertainty began and would end
  8. Briefly explain how the approach to resolving each uncertainty or group of uncertainties was a project or sub-project
  9. Set out the plan for resolving each uncertainty or group of uncertainties
  10. Set out the steps your projects took to resolve each uncertainty, from the beginning of the qualifying project to the work ceasing

The company or its agent should then, supported by a competent professional as needed:

  1. Identify the activities that directly contributed to resolving each uncertainty as part of each project to advance a qualifying field of science or technology
  2. Identify qualifying indirect activities that were part of the project and are listed in paragraph 31 of the DSIT guidelines
  3. Identify the qualifying costs of the qualifying activities from its records
  4. Check if any of the costs of qualifying activities are restricted or disallowed by GAAP, the DSIT guidelines or tax law