How to Write a Technical Narrative for your Research and Development (R&D) Tax Claim

Creating a compelling technical narrative and having a good record keeping process can help reduce the risk of investigation and maximize your R&D tax relief claim.

HOW TO WRITE A TECHNICAL NARRATIVE?

The technical narrative should be written with input from those involved in the project and detail the specific nature of the advance and uncertainty, and how a competent, qualified person addressed this, demonstrating to HMRC the process undertaken and the technical hurdles required to achieve success.

The R&D technical narrative should provide a compelling demonstration of:

the technological innovation(s) that your company has sought
the current limitations
the challenges you faced
the resources used
the outcomes achieved

HOW TO GET A QUICKER PAYOUT

There is no standard format for presentation, but reports will usually begin with a background of your company to explain the context of your R&D work.

In order to substantiate the claim, HMRC requires a short summary on a sample of projects that showcase the type of R&D your company is doing.

The ideal situation is to include detailed case studies of at least 1 to 3 projects. If you’re company has more than 4 projects, you must include detailed descriptions of at least 3 projects (up to a maximum of 10), which between them cover 50% or more of your total qualifying R&D costs.

PREPARE A ROBUST CLAIM

Start by making sure that the claim has been well prepared and the HMRC officer will easily be able to see that the company has undertaken qualifying R&D. The technological advances and uncertainties should be clearly and concisely described, and the relevant costs clearly analysed.

While you don’t want to leave any qualifying activity or eligible costs unclaimed, it’s equally important to ensure you don’t include items that simply won’t qualify.

INCLUDE BACS DETAILS

If the claim is for a payable tax credit, including the company’s banking BACS details with the claim will speed up the payment process once the claim is passed.

HMRC aims to pay 95% of SME credit claims within 28 days, although it is currently not achieving that target. Where the company has not included its BACS details, HMRC suggests that this delay can rise to 60 days.