There are 11 key terms used in the Guidelines that define R&D tax relief. We’re working off the very latest version, at the time of writing, which was updated in March 2023.

The guidance is published in two places on the website. Both have identical text, but the version provided by the Department for Science, Innovation and Technology is slightly more helpful, as they highlight in bold terms with specific definitions. In this article, all the emphasis added to quotes from the guidance is ours.

One of the most common issues with the R&D scheme is that applicants use words like ‘project’ or ‘uncertainty’ in ways that make sense to them, but which conflict with the very specific definitions included in the guidance.

Other terms in the guidance are used much less commonly. Unfortunately, people often misunderstand those too! The guidance does define these, but often in ways which lead to even more confusion.

Our goal with this article is not to re-explain things which are already clear in the guidance. Throughout we’ve highlighted the areas which commonly cause problems, and given some pointers on how to handle them.

Once you’re clear on what is meant by all the key terms, you will then need to explain and discuss everything with your client in detail, to gather the right information to support their claim. You can download our free R&D Eligibility Checklist to guide you through this conversation and make sure you don’t miss anything important.


You can use this list to jump to a specific definition within the list.

Science and Technology

The guidance includes the very basics. Even the word ‘science’ is given a specific definition. This excludes social sciences like psychology, and certain other areas of research, like economics, which a lay person might consider to be scientific. Technology is then specifically defined in relation to this restricted definition of science – which may be a tighter definition that people typically have in mind.


The definition for project is a little wordier and has two key points you’ll need to explain to your client.

A project consists of a number of activities conducted to a method or plan in order to achieve an advance in science or technology.

In part due to the efforts of unscrupulous advisors, some SMEs are under the impression that any work which results in an advance will count as R&D, even if it came about by accident, or as a side effect of other work.

In fact, the definition is clear here that the work must be premeditated. That’s one of the reasons why talking about “trial and error” can be a red flag for HMRC’s caseworkers, as it suggests that the company was making it up as it went along rather than setting and testing a hypothesis.

And in the event of an enquiry, HMRC often asks for documentation created at the time of the project, to prove that it was planned and methodical – rather than re-badged as R&D after the fact.

A project may itself be part of a larger commercial project, but that does not make the parts of the commercial project that do not address scientific or technological uncertainty into R&D.

This paragraph highlights that the work you claim for must all relate to the specific advance and uncertainty. If that work was only a small part of a larger project within the organisation, it’s just the small part that counts – so don’t fall into the trap of over-stating the claim.

Start and end of R&D

Defining the start and end of R&D is vital to preparing an accurate claim. The guidance states exactly what timeline to consider:

R&D begins when work to resolve the scientific or technological uncertainty starts and ends when that uncertainty is resolved or work to resolve it ceases.

So, when you’re defining the boundaries of the project, you first need to understand what HMRC means by ‘technological uncertainty’. (Don’t worry, we’ll get to this soon.)

Being clear about when R&D is deemed to start and stop is also helpful in reports and enquiries. In some cases, you may need to explain what work was done to establish the industry baseline, or the ‘readily deducible’ approaches that were tried before the R&D started.

This work is important to the project, and therefore relevant to the report, but it doesn’t count as R&D itself. Make sure you’re clear about this – you could state something like “At this point, we had exhausted all publicly available knowledge and taken readily deducible steps to resolve the uncertainty but we were unsuccessful. We therefore deemed this to be the starting point of our R&D.” You could state something similar for the end of the project too.

Advance in science or technology

Of the 11 definitions we’ll cover here, this one makes the top 2 for Most Important! It’s very broad, as it’s intended to cover a wide range of science and technology. The definition draws out a couple of other key terms, which will look at shortly, and highlights distinctions between work which HMRC would and would not consider to be an advance.

Work which uses science or technology but which does not advance scientific or technological capability as a whole is not an advance in science or technology.

In other words, you could be using cutting edge tools and methodologies, but that’s not enough on its own. What’s relevant is whether you were trying to go beyond what existing technology could do. The key distinction is whether you are advancing the science or technology itself, or improving a commercial outcome by using existing science or technology.

For example, say your client is in manufacturing, and they purchase a new piece of advanced machinery. Their experts spend a lot of time learning how to use the tool to improve the production of a part or product, and in the end they’re able to produce that product 25% faster than before.

That’s an advance in the production, for sure, but during that process they didn’t make an improvement to the underlying technology of the tool itself. The development of the machinery may have been eligible for R&D tax relief, but the project to figure out how to use it effectively usually isn’t. (There can be exceptions to this, however, such as when the tool is being used far outside its intended design parameters.)

Substitute machinery for software, chemicals, ingredients, building materials, algorithms, etc, and you can see how easily this misunderstanding crops up in all kinds of different fields and projects.

The ‘advance’ is one of several key points covered by our free R&D Eligibility Checklist.

Overall knowledge or capability

In the context of R&D claims or enquiries, we usually refer to ‘overall knowledge or capability’ as the ‘technological baseline.’ And expressing this clearly is vital to explaining the advance in technology. In other words, to make a convincing case for the advance, you first need to set out the starting point. This shows you understand where your client was advancing from.

… the knowledge or capability in the field which is publicly available or is readily deducible from the publicly available knowledge or capability by a competent professional working in the field.

The point here about ‘publicly available’ is clarified further in the guidance, saying that in some cases, work done independently, or to recreate a largely secret advance made by another company, can still count.

Interestingly though, we’ve seen HMRC’s caseworkers use some arguments to deny relief that seem to be in conflict with this, including:

  • Stating that the advances have already been made by other companies, so were not advancing science or technology;
  • Stating that the advances appear to be advances for the company alone, rather than for the industry.

Both these sweeping statements lose the nuance of the exceptions that are specifically given in the guidance. If your client’s claim is a similar case, you’ll need to be prepared to take a firm and detailed approach in rebutting their argument.

Competent professionals

HMRC didn’t define ‘Competent professionals’ within its main guidance because it assumed the term would be self-explanatory. However, as enquiries started to hinge on whether the applicant’s staff could be considered to be Competent Professionals, they later produced a definition to clarify this (CIRD 81300).

The definition they give is relatively clear, and explains what makes a person a ‘competent professional’ and what doesn’t.

Unfortunately, it’s not enough to employ Competent Professionals and have them state that they believe the work to be R&D. Instead, you need to:

… explain clearly, without the use of jargon,

  • what the advance in science or technology being sought is, and
  • why it is an advance in the overall knowledge or capability in a field of science or technology, rather than just in the company’s own state of knowledge or capability, and
  • so should objectively review the current state of knowledge, and
  • the work carried out.”

We’ve added the bullet points structure to help you make sense of it.

In short, they’re asking that you back up the opinions of your competent professionals by including the reasoning they’ve used to form the opinion. The clearest way to do this is to explain:

  1. the technological baseline
  2. how that baseline was established
  3. the advance relative to that baseline,
  4. spell out how the advance improves on that industry baseline, and
  5. what work was done by the competent professional(s) to try and achieve it.

And as they say, you need to do this clearly, without jargon, as their caseworkers themselves will probably not be competent professionals in that field.

It’s possible they still won’t accept the opinion of your competent professionals, in which case you will need to gather further evidence of their competence, and/or ask the caseworker to outline their own experience in the sector so their opinion can be weighed accordingly.

Appreciable improvement

The reason your client’s competent professionals are so crucial to the claim is that the advance they’re trying to make must be ‘appreciable’. This is one of the most subjective parts of the guidance, because it’s clear that the definition relies on the judgement of the competent professionals.

…should represent something that would generally be acknowledged by a competent professional working in the field as a genuine and non-trivial improvement.

Informally, you might describe it as something that would impress industry peers as going well beyond the ‘day to day’ type problem-solving. Because it’s so subjective, you may need to refer to what other companies have done, peer-reviewed scientific papers, patents and testimonials from expert consultants. None of these are fool-proof, but the key point is that the advance must be significant. (But not necessarily large. Sometimes, even very small improvements can be significant!)

Scientific or technological uncertainty

This is the other contender in the top 2 for Most Important definition. An advance in technology without any technical uncertainty is not R&D for tax purposes, so you need a firm grasp of both concepts to prepare a successful claim.

Key to the definition, once again, are the counter-definitions – the paragraphs that explain what doesn’t meet the definition.

In this case, ‘uncertain’ is a familiar word so it’s commonly misinterpreted. To avoid this, the guidance clarifies:

Uncertainties that can readily be resolved by a competent professional working in the field are not scientific or technological uncertainties. Similarly, improvements, optimisations and fine-tuning which do not materially affect the underlying science or technology do not constitute work to resolve scientific or technological uncertainty.

Broadly, a technical issue is not an uncertainty if:

  • You can find the information you need in the public domain,
  • You can engage specialist consultants with experience of solving that type of issue,
  • You can derive the information you need by applying or trivially adapting well-established tools and techniques.

If the advance could be achieved relatively easily by using existing tools and methods, then any technical problems encountered are unlikely to rise to the level of an ‘uncertainty’ and HMRC will say that the definition of R&D wasn’t met.

Readily deducible

The phrase is used 3 times within the guidance, twice in combination with ‘Competent Professionals’. There’s no specific definition of ‘readily deducible’ included in the guidance – it’s another one which was assumed to be self-explanatory.

Unfortunately, this is another area of the guidance which HMRC’s caseworkers are using as a blunt instrument to deny claims. They’ll often look at the claim report and state that the advance and uncertainties seem readily deducible to them – often without any in-depth knowledge of the technology! This can be exasperating and time-consuming, as it usually requires trying to educate the caseworker.

Previously, HMRC published a ‘Simple Guide’ to R&D Claims. Although it’s recently been retired, parts of it are still relevant. In it, HMRC give just one example of how to explain that something was not readily deducible:

It might be publicly known that others have tried to resolve the uncertainties and failed.

If you’re not able to assert or evidence that others have tried and failed, ask the client’s Competent Professionals to explain what they did to establish that existing methods were insufficient. Reports of experiments or attempts which failed, communications between team members who have reached a ‘dead end’ or any other hard evidence they can produce will help in an enquiry too.

System uncertainty

This, like ‘readily deducible’ is a subjective term, which can be hard to define effectively. The example given in the guidance is helpful, and there are many other fields where this could apply.

For example, in electronic devices, the characteristics of individual components or chips are fixed, but there can still be uncertainty about the best way to combine those components to achieve an overall effect.

We do see system uncertainty mentioned in lots of claims, but where it’s the only uncertainty, these claims may be perceived as weaker. (Sometimes clients will cite system uncertainty because they can’t put their finger on any specific engineering issue – and that’s a concern.)

If you’re relying on this definition to make your case, make sure you explain exactly what caused that system uncertainty to arise, and give as much evidence as you can about why it was deemed to be uncertain.

Have confidence in your R&D tax relief claims

The tighter your grasp on the definitions in the guidance, the strong your claims will be. All these definitions are essential when preparing to talk to your client about their claim and establishing if their work is eligible.

We have other tools and resources which can help with this too:


You can use this list to jump to a specific definition within the list.