Many businesses mistakenly believe that only successful R&D projects qualify for tax relief.
In reality, the UK’s R&D tax credit scheme is designed to reward innovation whether the project succeeds or not.
If your clients have abandoned, pivoted, or failed projects, they may still be entitled to claim, and it’s your job to ensure they know this.
What constitutes a failed R&D project?
In the context of R&D tax relief, failed projects are often referred to as aborted projects.
A project may be considered “failed” if:
- The desired outcome wasn’t achieved due to technical challenges.
- The product or process didn’t meet the required specifications.
- It became commercially unviable or obsolete.
- It had to be abandoned due to unforeseen complexities.
Even in these cases, if the work involved an advance in science or technology, the associated costs – such as staff wages, subcontractor fees, materials, and software – can be included in an R&D tax relief claim.
How to document failed R&D projects
Successful R&D tax credit claims rely on clear and thorough documentation.
When a project doesn’t achieve its intended results, it’s crucial to maintain detailed records to support the claim, including:
- A summary of the project’s aims and objectives.
- A breakdown of each stage of development, highlighting the technical challenges encountered.
- Financial records detailing expenditure on staff, subcontractors, and materials.
- A report explaining why the project was discontinued, including any unexpected obstacles.
Our R&D tax specialists work alongside accountants like you to identify qualifying activities, ensure compliance, and maximise claims.
We take care of the heavy lifting, allowing you to offer added value to your clients without the administrative burden.
Has your client recently had a R&D project fail? Reach out to our experts today and ensure they claim what they’re entitled to.
