HMRC has recently launched an online tool intended to help businesses determine whether their projects include activities that qualify as research and development for tax purposes. The tool can be found here, and the Institute of Chartered Accountants in England and Wales has published its initial views on the tool here.
At first glance, the tool appears straightforward and accessible. It leads users through a sequence of short questions about the nature of their project, the advances sought, and the uncertainties faced. The ICAEW article notes that HMRC has said, in the event of a compliance check, it is “unlikely to disagree” that the project involves R&D activities if the answers given when using the tool were “based on your project’s facts and you can clearly support and explain them”.
This is a bold statement but also highly nuanced. The tool itself is basic, and the questions require only simple yes or no answers. It is difficult to see how this format alone could give HMRC sufficient assurance that the user has a deep understanding of the underlying legislative framework. Simply selecting “yes” does not show that the person completing the form appreciates the meaning of an advance in science or technology, or the nature of scientific or technological uncertainty as defined in the statutory guidance. I believe what the blog is saying is if “yes” is answered and you can prove “yes” is right then you will not be challenged. But this is the way it has always been.
Anyone familiar with HMRC’s own manuals, particularly the main Guidelines, will know that qualifying R&D involves a careful analysis of technical progress, uncertainty, and systematic investigation. These concepts require explanation and evidence, not tick-box confirmation.
In practice, I see this new tool as a helpful introduction for those new to R&D tax relief. It could be a good exercise to complete with clients who have never made a claim before, used alongside detailed discussion of the Guidelines and the wider legislative framework. Keeping a copy of the completed tool as part of standard client records makes sense, but it should not be viewed as proof of qualification in its own right.
The suggestion, as reported by the ICAEW, that completing the online tool could make HMRC “unlikely to disagree” with a project’s eligibility risks giving a false sense of security. This is not comparable to the formal Advance Assurance process, which involves direct interaction with HMRC and provides a degree of protection for future claims. Advance Assurance has its limitations and is not scalable across the whole claimant population, but it remains a far more rigorous and meaningful process.
By contrast, the new checker is much less demanding than the detailed requirements of the mandatory Additional Information Form. That form, introduced in August 2023, requires narrative explanations of qualifying projects, advances, and uncertainties, as well as details of competent professionals and costs. It provides a far stronger evidential basis for any claim. Even so completing it, is not an automatic safeguard against HMRC challenge, and nor should it be.
Overall, while HMRC’s new R&D tool is a step in the right direction, it is only a starting point. Businesses should treat it as an awareness and training aid rather than a definitive test of eligibility. Proper R&D claim preparation still requires a thorough understanding of the legislative definitions, careful documentation, and a clear link between the company’s technical work and the statutory criteria. I think the comments in the ICAEW blog could be misunderstood.
If you would like advice on how to ensure your R&D claims meet HMRC’s detailed requirements, or to understand how this new tool fits within your compliance process, please contact us.
Christopher Toms MA MAAT
Compliance Director
RandDTax
HMRC’s New R&D Tool: A Useful Step, But Only a First Step
HMRC has recently launched an online tool intended to help businesses determine whether their projects include activities that qualify as research and development for tax purposes. The tool can be found here, and the Institute of Chartered Accountants in England and Wales has published its initial views on the tool here.
At first glance, the tool appears straightforward and accessible. It leads users through a sequence of short questions about the nature of their project, the advances sought, and the uncertainties faced. The ICAEW article notes that HMRC has said, in the event of a compliance check, it is “unlikely to disagree” that the project involves R&D activities if the answers given when using the tool were “based on your project’s facts and you can clearly support and explain them”.
This is a bold statement but also highly nuanced. The tool itself is basic, and the questions require only simple yes or no answers. It is difficult to see how this format alone could give HMRC sufficient assurance that the user has a deep understanding of the underlying legislative framework. Simply selecting “yes” does not show that the person completing the form appreciates the meaning of an advance in science or technology, or the nature of scientific or technological uncertainty as defined in the statutory guidance. I believe what the blog is saying is if “yes” is answered and you can prove “yes” is right then you will not be challenged. But this is the way it has always been.
Anyone familiar with HMRC’s own manuals, particularly the main Guidelines, will know that qualifying R&D involves a careful analysis of technical progress, uncertainty, and systematic investigation. These concepts require explanation and evidence, not tick-box confirmation.
In practice, I see this new tool as a helpful introduction for those new to R&D tax relief. It could be a good exercise to complete with clients who have never made a claim before, used alongside detailed discussion of the Guidelines and the wider legislative framework. Keeping a copy of the completed tool as part of standard client records makes sense, but it should not be viewed as proof of qualification in its own right.
The suggestion, as reported by the ICAEW, that completing the online tool could make HMRC “unlikely to disagree” with a project’s eligibility risks giving a false sense of security. This is not comparable to the formal Advance Assurance process, which involves direct interaction with HMRC and provides a degree of protection for future claims. Advance Assurance has its limitations and is not scalable across the whole claimant population, but it remains a far more rigorous and meaningful process.
By contrast, the new checker is much less demanding than the detailed requirements of the mandatory Additional Information Form. That form, introduced in August 2023, requires narrative explanations of qualifying projects, advances, and uncertainties, as well as details of competent professionals and costs. It provides a far stronger evidential basis for any claim. Even so completing it, is not an automatic safeguard against HMRC challenge, and nor should it be.
Overall, while HMRC’s new R&D tool is a step in the right direction, it is only a starting point. Businesses should treat it as an awareness and training aid rather than a definitive test of eligibility. Proper R&D claim preparation still requires a thorough understanding of the legislative definitions, careful documentation, and a clear link between the company’s technical work and the statutory criteria. I think the comments in the ICAEW blog could be misunderstood.
If you would like advice on how to ensure your R&D claims meet HMRC’s detailed requirements, or to understand how this new tool fits within your compliance process, please contact us.
Christopher Toms MA MAAT
Compliance Director
RandDTax
Share this post