Nothing new under the sun – When does replicating innovation count as R&D?

Many of those who undertake R&D work do so to create something that is entirely new and may not have been conceived of prior to the project getting underway.

However, there is plenty of scope for an R&D project to centre around replicating something that already exists.

It requires an in-depth knowledge of HMRC’s guidance to make a valid R&D tax relief claim from this kind of work, but such projects should not be disregarded offhandedly.

Is novelty a core part of an R&D tax relief claim?

Given that an R&D tax relief claim should be seeking an advance in science and technology, contain some degree of technical uncertainty and not be readily deducible by a competent professional, it is understandable that novel projects more easily fit the bill.

However, novelty is not a core criterion, as projects that seek to replicate an existing innovation could still align with the requirements.

The determining factors will be whether the advance being sought is public knowledge and whether there is a benefit to replicating the advance that extends beyond the company itself.

While it might be tempting to figure out someone else’s trade secrets for the commercial benefit it would bring, HMRC needs to understand how the work would benefit the sector as a whole.

One of the most effective ways to meet this goal would be to take something that already exists and make it better.

For example, if a business were to deduce how their competitor created an innovative piece of technology, they could find a way to replicate it using more durable components or in a way that is cheaper for the end-user.

This work would not be viewed as novel, but it could be an advance if it is appreciably improved.

A lack of novelty would also not be a barrier if two companies achieved similar advances around the same time.

It would not be reasonable for HMRC to deny an R&D tax relief claim if one company did not know the other was working on something similar and succeeded before they did.

What would matter in this scenario is the ability to prove that work was undertaken before the rival company’s advance became public knowledge.

How should replicated work be handled in an R&D tax relief claim?

Understanding how HMRC determines the eligibility of an R&D tax relief claim is vital when handling a situation as nuanced as replicated work, so engaging an R&D tax consultant can be beneficial.

It is little surprise that HMRC may be sceptical of an R&D tax relief claim that focuses on replicated work or that covers a project that is similar to another company’s work.

Our team of experts understand the complexities of these situations and is experienced in demonstrating the validity of R&D projects in alignment with HMRC criteria.

In the event of an enquiry being launched, we can work with accountants and innovative businesses to gather the necessary evidence to defend a valid claim.

Even if we did not compile the original R&D tax relief claim, we will defend anything legitimate, preserving qualifying expenditure that does align with HMRC’s guidelines.

A strong technical narrative underpins claims relating to replicated work, as this provides the space to elaborate on how the work constitutes an advance and demonstrate why the claim should be accepted.

Approach different kinds of R&D tax relief claims with confidence by getting in touch with our team.

Adam Bointon

Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ 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.