The technical documentation in a research and development (R&D) tax credit claim should provide a compelling demonstration of the following:
- technological innovation(s) that your company has sought
- the challenges your company faced
- the resources used
- the outcomes achieved
What is an R&D technical narrative?
In support of your R&D tax credit claim, you need to provide technical documentation. This is sometimes referred to as an R&D technical narrative. These terms all refer to the write-ups of your R&D projects, but the exact contents can vary. Many businesses submitting their first R&D tax claim themselves are keen to see an R&D technical narrative example to make sure it contains all the required information.
Writing an R&D technical narrative
There is no standard format for presenting the information in a technical documentation to HMRC. There is no template for an R&D technical narrative. It follows then that there is no template for an R&D technical narrative. However, it will usually begin with a background of your company to explain the context of your R&D work.
The R&D technical documentation describes how a company’s activities and projects have been assessed to determine if they qualify for the R&D tax credit incentives. There may be commercial aspects of a project which cannot be included; these should be isolated. In this way, the R&D tax credit documentation should be able to detail how your associated costs have been treated.
R&D technical narrative example: how to include sample projects
You should also include case studies that explain some example R&D projects in detail. These demonstrate to HMRC that the guidelines for R&D tax credits are being properly applied and have been understood.
The case studies need to include R&D examples with sufficient detail for an HMRC inspector to understand how the projects you have undertaken have been assessed, and how they align with the R&D guidelines. As far as possible, you should explain your projects in layman’s terms. However, be careful to explain the technological complexities you faced in enough detail to support your R&D tax credit claim.
What else to include in your R&D technical documentation
As well as explaining the associated costs and some example projects, your R&D technical documentation might include:
- Contextual information about your company;
- Details of the key individuals who have worked on your projects; and
- The technical difficulties you encountered in your projects.
At ForrestBrown, our team comprises chartered tax advisers, chartered accountants, technical sector specialists, and two former-HMRC inspectors. We work with you to ensure the right information is included in comprehensive R&D technical documentation, so you can be assured that your R&D tax credit claim is both robust and defensible.
Have a question for our team?
It can be complicated to submit an R&D tax credit claim to HMRC’s exacting standards.
Get in touch with our team of chartered tax advisers, chartered accountants, lawyers, sector specialists, former HMRC inspectors and quality assurance experts to access expert guidance for your claims.