What goes into the technical documentation?

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

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.