Claiming R&D for Unsuccessful Projects

The facts and figures that surround R&D tax credits are truly amazing, but if there is one statistic that really stuns us it is that 90% of UK companies that are eligible for R&D tax credits are not aware they can make a claim. In a previous blog post, we discussed how there are still lots of misconceptions about the R&D tax credits scheme, one of these being that you can only claim for successful projects. We swiftly debunked this myth and now we would like to pay closer attention to the truth – you can claim R&D for unsuccessful or even incomplete projects.

Unsuccessful R&D is still R&D

The criteria for an R&D claim are not based on whether the project is successful or not; it’s based on the activities that are carried out.

The government guidelines state:

“Even if the advance in science or technology sought by a project is not achieved or not fully realised, R&D still takes place.”

So, if your company has spent money, time, and energy on innovating, improving, or developing a process, product, or service, chances are it qualifies for a tax credit.

What would count as an unsuccessful project?

Say your company worked on developing a new system or tool but it fell short of the desired outcome. You could still successfully claim R&D tax credits. What matters is the fact you attempted to develop the

system or tool. You may have made some progress along the way, meaning there could even be potential scope for further research and development further down the line.

Unsuccessful projects can demonstrate difficulty, which is the very nature of researching and developing ideas, products, systems, and processes for the future success of your business. Do not give up on your project if it has failed or been abandoned. If you are not sure if your business qualifies, talk to us, and do not miss out. We have identified and made successful claims on lots of projects for our clients where R&D has taken place and they have been completely unaware.