The principles of the RDECX methodology are such that projects should still be documented and evidenced in line with ongoing HMRC requirements. The index provides a new and more objective lens for deciding whether a project is eligible. This additional level of assessment will assist in making the claim more robust. It allows companies to be more self-sufficient and is very likely to deliver greater efficiency in time and cost.
HMRC are not able to approve or endorse applications such as RDECX. The index has been discussed in detail with HMRC R&D specialists however, at launch, there will be a significant proportion of the HMRC R&D team who will not be familiar with the index. However, even with use of the index projects should still be evaluated in line with ongoing HMRC requirements. HMRC will be provide with a universal log in to RDECX and so our expectation is that familiarity with the index will increase over time.
It is important that projects are evaluated and documented in line with HMRC guidelines. If the company is claiming up to three projects, it must include details for each one. If four or more projects are claimed, it should include all details of at least three to cover 50% or more of the total qualifying R&D costs. For those projects that are not documented in applying these guidelines, we would recommend that the index is nevertheless used to provide supportive evidence for inclusion.
This might indicate that the project is being considered too broadly where, looked at as a whole, there were significant element of routine development? If broken down into two or more components some of these elements may be associated with a greater level of scientific or technology uncertainty. In which case, there would be merit is evaluating the components separately.
Absolutely not. Many projects will be eligible where there is no third party evidence. Please note that the evidence must be independent and give a strong indication that the project represents a scientific or technological advance. If the index is lower than 50% and there is no evidence the company could consider seeking and expert validation (see Expert Support). However, there is no guarantee that this will generate a positive outcome. Please contact the RDECX team for more information.
As a first step we would recommend, where appropriate, discussing the project with colleagues as this may provide a wider perspective around the scientific or technological baseline. The company could consider seeking and expert validation (see Expert Support). Please contact the RDECX team for more information.
If there are no alternatives in assessing cut off (beginning, end and excluded activities) or qualifying expenditure with greater accuracy, the company could consider claiming on reduced costs in order the provide greater certainty that the amount claimed could not be considered excessive. Going forward, we would recommend that new processes and controls are implemented to ensure improved accuracy in identifying qualifying activities and costs.
Our recommendation is to make full disclosure at the point of submission. FTI Consulting’s evaluation schedules and templates have been developed to address all the key criteria in a concise manner ensuring the level of disclosure is sufficient but not excessive.
To validate qualifying R&D in areas of uncertainty FTI Consulting have partnered with Patent Attorneys who are trained in interpreting innovation as applied to BEIS Guidelines for R&D. Not only do they bring in an objective 3rd party perspective, they are naturally disposed to identifying innovative qualities, where they exist, in order to support a project. There are different options of validation that can be used depending on the scale of the project. The output is consequently more certain and robust, putting forward a stronger case where the advance is less clear cut. However, there is no guarantee that this will generate a positive outcome. Please contact the RDECX team for more information.