The short answer
For UK tax purposes, R&D centres on a project seeking an advance in science or technology through resolving scientific or technological uncertainty. Being new to your business is not enough: the assessment looks at the wider field and what a competent professional could readily work out.
Start with the technical question
A project being new, difficult or commercially valuable does not, by itself, establish R&D for tax purposes. Start with the scientific or technological capability the project was trying to extend, then explain the obstacle that could not be resolved using readily available knowledge.
HMRC’s public eligibility guidance describes an advance in the wider field, not simply an improvement in your own business. An appreciable improvement is a meaningful technical change, rather than a routine upgrade. A project can seek an advance even where another business has achieved something similar but its methods are not publicly available.
The terms behind HMRC’s guidance
- Field of science or technology
- The technical discipline in which the work sits. Name it precisely enough to assess what was already possible; a business sector alone is not that explanation.
- Baseline knowledge or capability
- The starting point against which the proposed improvement is assessed. Describe relevant existing methods, their limitations and what a professional in the field could reasonably work out.
- Scientific or technological uncertainty
- A gap concerning feasibility or how to achieve the intended result, rather than uncertainty about sales, budgets or delivery dates. Read the full glossary explanation.
- Competent professional
- Someone with relevant expertise in the particular field, able to assess the state of knowledge and explain the technical challenge. The relevance of their knowledge matters; a job title alone does not establish this.
Separate the R&D from the wider project
A commercial project can contain a smaller qualifying R&D project. HMRC’s guidance on identifying activities explains why the two should not be treated as interchangeable. Work directed at resolving the technical uncertainty needs to be distinguished from routine delivery and commercial activity.
The definition also includes specified qualifying indirect activities: certain supporting activities related to the R&D project. This is not permission to include all overheads. Whether a particular cost can be claimed remains a separate question under the relevant scheme.
An illustrative example
A manufacturer wants a lighter component that will withstand repeated heat cycles. Buying a familiar material and applying established production settings may be routine engineering. Investigating a material behaviour that cannot readily be predicted using available knowledge could raise a different question.
The useful explanation is not “we developed a new component”. It is the specific limitation of existing capability, what could not be deduced, and how the investigation addressed it. This hypothetical example is not a finding that a project qualifies.
Show the work, not just the outcome
A useful project account makes the reasoning traceable. As a practical starting point, bring together:
- The intended technical result and the existing methods considered.
- The particular question the team could not readily answer.
- Who assessed it and why their experience is relevant.
- The investigations, tests and changes in approach, including unsuccessful attempts.
- When the uncertainty was resolved or work on it stopped.
These prompts are an organising aid, not a substitute for the facts or a prescribed claim narrative. An unsuccessful investigation can still contain qualifying work; commercial success is not the definition of R&D.
Qualification is only the first step
HMRC provides a project-checking tool and supporting guidance. Use the actual facts of each project and retain the information used to answer its questions. Its outcome does not mean every related cost is claimable.
Next, check eligible expenditure, the scheme and accounting period, and the applicable claim requirements. In particular, do not assume that subcontracting, overseas work or grant funding is treated identically across different periods and schemes.
If you would like a specialist assessment of your projects, explore our UK R&D tax relief service.
Check the detail
Sources & scope
United Kingdom. This entry uses the 2023 DSIT guidelines, applicable to accounting periods beginning on or after 1 April 2023. Earlier periods require the earlier guidance. It explains the activity definition, not relief rates or a complete claim assessment.
This is an InnoFund explanation, not official guidance or advice on a particular claim. The facts, relevant law and applicable scheme rules must be considered together.
Sources checked: 5 September 2026. This is separate from expert sign-off.
- HMRC: check if you can claim R&D tax relief
Public eligibility guidance
- DSIT guidelines in HMRC’s manual
CIRD81910, paragraphs 3–14, 19–32
- HMRC: identifying qualifying R&D activities
GfC3, part 4
- HMRC: project-checking tool guidance
Before you start and next steps
- HMRC: costs you can claim
Costs, project boundaries and period-specific rules