HOW TO WRITE A TECHNICAL NARRATIVE FOR YOUR R&D CLAIM
R&D Tax credits and R&D Tax Relief are tremendously valuable and beneficial for businesses working in the field of research and development. It provides businesses a chance to make an R&D claim for qualifying R&D expenditure. It provides companies with a chance to reinvest and grow with R&D Tax Credits for the amount invested on R&D activities or R&D Tax Relief for getting relief from tax.
R&D claim is an extremely useful source for your company’s growth. Claiming R&D tax credits might be very challenging. The first challenge is to identify your eligible R&D activities to check if your project falls under the HMRC’s eligibility criteria for an R&D claim. The second challenge is to calculate your R&D Tax Credits or R&D Tax relief to make a claim. Consulting R&D Tax specialists can be very useful for the assessment of your eligibility and qualifying cost calculations. Once you have calculated your eligible activities for the R&D Tax relief claim, another strenuous task is proving your eligibility to HMRC for claiming R&D Tax Credits. Technical narrative or R&D report is a significant part of your R&D claim, as its objective is to prove your eligibility to HMRC for R&D Tax Relief Claim.
What Does Technical Narrative For R&D Tax Credits Claim Includes?
The technical narrative for R&D Tax Relief or R&D Tax Credits should include details of your R&D activities, proving that your project fulfills prerequisites of the R&D claim. It should be written under the guidelines provided by HMRC for the claim. Your technical narrative should be comprehensive fully supporting your R&D claim including details of:
- What are eligible R&D activities?
- Your project belongs to which field of science and technology?
- Innovations or technical advancements you were trying you achieve
- Scientific and technological uncertainties you faced
- Resources utilized
- Outcomes of your project
What Should Be the Format for the Technical Narrative of Your R&D Claim?
HMRC has not fixed any format for R&D claims. You should begin your R&D report with a comprehensive background of your company or project. After the introduction write a short summary of your R&D Tax relief or credit eligible activities. HMRC requires you to explain how it aims to bring innovation in science and technology in the report.
It is suggested to include details of 2 or 3 R and D projects and if your company is involved in more than 4 R&D projects then you should include details of at least 3 projects. After providing comprehensive details of your R&D projects, HMRC requires you to provide calculated qualifying R&D expenditure in your report.
How to Make Your R&D Claim Report Strong and Convincing?
It is important to prepare a strong claim to convince HMRC regarding your eligibility and if your report lacks strength and all the required details then it can be subjected to an inquiry by HMRC, delaying the whole procedure. Your report should:
Be to the point:
Your technical narrative for the R&D Tax Credits claim should include a precise amount of details HMRC requires, not more than that. Avoid including irrelevant facts and details.
Include details of 2-3 projects
It is better to include details of 2-3 R&D projects instead of one in your R&D tax relief or credits claim.
Provide link report with the costs provided in CT600:
It is suggested to link your technical narrative with the costs you provided in the CT600 form, it will make it easier for HMRC to create a link between two, leaving no room for misinterpretation of the facts provided.
Include short, clear, and factual statements:
Write a technical narrative in short and factual sentences, making it clear to HMRC that you fully understand the criteria for the claim and you fulfill its prerequisites. State everything clearly and avoid ambiguity in the report.
Not include your personal details:
HMRC does not require your personal details. Avoid adding irrelevant details as much as you can. It will create a bad impression on the HMRC officer.
How Consulting Our R&D Tax Specialists Can Be Helpful For Your R&D Tax Relief or R&D Tax Credits?
Writing a technical narrative for an R&D claim may seem like an arduous and complicated thing, it is always better to take help from an expert. Our R&D tax specialists are experts in tailoring ideal R&D reports. We cover all the required details reducing chances of ambiguity or misinformation in your technical narrative. Our R&D Tax specialists take all the information from you over a small meeting, and tailor reports based on the information you provide. Our R&D Tax specialists make sure that report is rechecked and approved by you for all the facts mentioned to evade misrepresentation of facts.
Hence consultation from trusted R&D Tax Specialists like us can not only reduce chances of inquiry or rejection but also save you lots of time and effort. We not only maximise the value of your R&D Tax Credits and R&D Relief but also produce technical narrative making sure it is robust, persuasive, and compelling. R&D Tax specialists are also proficient in handling HMRC’s inquiries for R&D claims.
For consulting our R&D Tax Specialists, contact us now!