Defining Scientific or Technological Uncertainty

The guidance states that uncertainty arises when a competent professional in the field cannot readily deduce whether a goal is achievable using existing knowledge. It’s not about whether a task is time-consuming or requires careful thought; rather, it has to be unclear whether the intended outcome is even possible using existing, publicly available knowledge. Equally important, the project must aim to advance the broader field’s understanding or capabilities, not simply your own internal know-how.

Where Uncertainty Begins and Ends

Qualifying R&D begins the moment you start working to resolve a genuine technological or scientific unknown. However, it’s important to define the boundaries of the project carefully. Activities that are part of your wider commercial endeavour but do not directly tackle the uncertainty won’t qualify. Once you’ve resolved the core problem (or concluded it can’t be solved), the R&D phase ends. Any subsequent optimisation or commercial testing, such as regulatory checks or aesthetic refinements, typically falls outside R&D scope.

Real-World Examples

Consider these scenarios to see how routine development differs from R&D for tax purposes:

Case Study: Furniture Fitting
A furniture company faces an issue where standard parts can’t be used under the project’s constraints. Since there’s no obvious off-the-shelf solution, they explore an entirely new fitting. Because the uncertainty isn’t “readily resolvable” by existing expertise, the sub-project qualifies for R&D relief.

Case Study: Low-Fat Dessert
A food manufacturer tries to improve shelf-life without affecting flavour. Competent food technologists find no straightforward method, so they attempt a technological advance. This sub-project qualifies as R&D. By contrast, simply testing multiple recipes for taste or aesthetic purposes alone would not.

Case Study: Biomedical Stent
Designers discover that making a new stent ultra-thin and bio-active for a specific patient group requires an advancement beyond the known field. The moment they start working to overcome this technical hurdle is the start of the qualifying R&D phase.

A Useful Checklist

To quickly gauge if your activity can be identified as containing a scientific or technological uncertainty, run through this short checklist:

1. Defined Project
Do you have a methodical approach aimed at resolving a specific technical or scientific challenge?

2. Readily Deducible?
Could a competent professional in your field solve this problem using existing public knowledge with minimal effort?

3. Advance in the Field
Will solving the problem increase the overall field’s knowledge or capability (not just your company’s)?

4. Meaningful Breakthrough
Is the solution more than a cosmetic tweak or basic routine modification?

If you can confidently answer ‘Yes’ to Questions 1, 3, and 4, and ‘No’ to Question 2, then you are likely dealing with a genuine scientific or technological uncertainty that can qualify for R&D tax relief.

Things to Watch Out For

• Innovation vs Advancement
  Not all pioneering work qualifies. Being “first to market” doesn’t necessarily mean you’ve achieved a genuine scientific or technological advance with a related technical uncertainty.

• Commercial vs Technological Risks
  The fact that a product might fail in the market doesn’t count as R&D uncertainty. Questions about market acceptance, cost feasibility, or brand position aren’t scientific or technological.

• System Uncertainty
  This can arise when known components are combined in a new way such that the outcome is genuinely uncertain to a competent professional. Businesses often overlook this, assuming it’s “just assembly” and thus non-qualifying. However, if the interaction of these components can’t be readily deduced from existing knowledge, it may be eligible. On the other hand, simply slotting standard parts together in a routine fashion will not qualify as R&D.

Conclusion and Next Steps

Clarifying ‘uncertainty’ is at the heart of making a successful R&D claim. The better you define your project boundaries and demonstrate that you’re tackling genuine unknowns in your field, the more likely you are to meet HMRC’s criteria. If you’re unsure where to draw the line —or just want a second opinion — get in touch with ABGi. Our team can help you identify the qualifying elements of your projects and ensure your claims stand up to scrutiny.