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The uncomfortable reality: truth isnโt enough
A company spends years developing a new capability. The work is real, the uncertainty is real, and the outcome is real. The claim gets ๏ฌledโand then it fails. Not because the work wasnโt R&D, but because it couldnโt survive how R&D is judged. That gap between truth and defensibility is where most R&D claims fall apart.
Many business owners assume that if their work quali๏ฌes, their claim will succeed. In reality, having R&D Tax Credits explained is only the starting point. R&D claims are evaluated on whether the work is structured, evidenced, and communicated in a way that aligns with how scrutiny is appliedโand that standard is far more rigid than most realise.
The four pillars that decide everything
Every successful R&D claim rests on four elements:
- a clear advance in a ๏ฌeld of science or technology
- a de๏ฌned scienti๏ฌc or technological uncertainty
- a correctly identi๏ฌed ๏ฌeld
- oversight by a competent professional
These are straightforward in isolation, but unforgiving in combination. Most failed claims donโt miss these elements
entirelyโthey fail because they donโt align cleanly with each other. When they donโt align, the claim becomes difficult to defend.
Where good claims go wrong
One of the most common mistakes is misrepresenting the ๏ฌeld being advanced. A company builds a sophisticated audiovisual recognition tool using arti๏ฌcial intelligenceโand claims theyโve advanced the ๏ฌeld of AI.
They havenโt.
Theyโve advanced audiovisual recognition using AI. Once the ๏ฌeld is wrong, everything else begins to unravel.
A second issue comes from how companies de๏ฌne the work. Businesses think in terms of projectsโeverything that went into the project feels like R&D. But R&D isnโt de๏ฌned by the project, itโs de๏ฌned by legislation. That means large parts of a project may not qualify, while smaller, less obvious elements might be the most important. This is where claims become bloated and vulnerable.
Costs create a similar problem. A company might invest ยฃ250,000 in a machine to support an R&D project, and from their perspective the logic is simple: it was bought for R&D, so it must qualify. Under scrutiny, that logic doesnโt hold. If the asset isnโt consumed or transformed as part of the R&D activity, it may not qualify as a consumable cost for R&D Tax Relief. When large costs donโt align with the rules, they quickly become focal points for challenge.
The real failure: narrative, not work
Itโs tempting to conclude that claims fail because companies misunderstand the rules. Thatโs only partially true. The deeper issue is that companies describe what they did, while authorities evaluate how that work maps to a speci๏ฌc framework.
Companies tell stories about projects. Scrutiny tests structured de๏ฌnitions.
If those donโt match, the claim breaksโeven when the underlying work is valid.
Why this keeps happening
There are a few consistent patterns behind failed claims. Claims are often led by ๏ฌnance or leadership teams who are too far removed from the technical work. Engineers and developers, who understand the detail, are rarely involved in shaping how itโs presented. At the same time, some R&D tax advisors rely on simpli๏ฌed processesโquestionnaires or high-level assumptionsโto scale their work.
None of this is malicious. In many cases, itโs simply a misunderstanding of a complex system. But it produces claims that are easy to submit and difficult to defend. As compliance requirements continue to evolve under the ERIS scheme, robust evidence and clear documentation of qualifying activity are becoming increasingly important.
The difference between risk and defensibility
A risky claim and a defensible claim can look similar on the surface, involving real R&D and comparable projects. The difference is structural.
A defensible claim aligns the ๏ฌeld, advance, and uncertainty precisely, anchors decisions in the right technical context, separates qualifying and non-qualifying activity clearly, and can withstand detailed questioning without contradiction. Thatโs what scrutiny is designed to testโand where most claims fail.
The question isnโt whether your R&D is real. Itโs whether itโs defensible.
If your team is spending too much time supporting your R&D claim, we should talk.
Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 yearsโ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and HMRC requirements.
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