Joined by the firm’s R&D specialist Christopher Harrison, the episode breaks down what actually qualifies as R&D in the eyes of HMRC and why the definition is far stricter than many business owners realise.
“People often say to me, ‘We’re innovative, that counts as R&D, right?’” said Rachael. “But HMRC’s test isn’t whether something is new to your business. It has to represent a genuine advance in science or technology for the wider industry.”
The conversation highlights a common misconception that trying something for the first time, improving an existing product, or investing heavily in development work automatically qualifies for relief. In reality, successful claims must demonstrate genuine technical uncertainty and an attempt to create a new or improved product, process or service that was not previously achievable using existing knowledge.
Christopher Harrison, who leads many of the firm’s R&D interviews with clients, explained that documentation is often the key difference between a strong claim and a rejected one.
“HMRC inspectors aren’t usually experts in your industry, so they approach claims logically,” he said. “They will look at your technical narrative, research what was already available on the market and assess whether the uncertainty you faced was real. If businesses can’t evidence what they knew at the time, the claim becomes much harder to defend.”
The episode also discusses the increasing scrutiny around R&D claims, including the introduction of the Additional Information Form and strict notification deadlines that can invalidate claims if missed.
Rachael also warns business owners about the rise of aggressive R&D claim firms promising easy tax refunds. “Unfortunately, we’re seeing a lot of ‘cowboy’ operators in this space,” she said. “Proper R&D claims require both technical understanding and tax expertise.”
The full episode of FFS, For Finance’s Sake provides practical advice for business owners considering an R&D claim and offers insight into how experienced advisers approach the process.
