1. Start high level
Preparing an R&D claim can seem complex when focusing on the finer details of a project. At this initial stage, many architects feel frustrated or simply don’t have the time to labour over an intensive claim, reverting instead to getting stuck into their next project. Our advice is to keep the assessment at a high level to start with, identifying each of your projects where qualifying R&D is taking place and then concentrating on fine-tuning the details where the process becomes more complex.
2. Be careful not to rely on assumptions
The RIBA Plan of Work is a helpful guide for planning a R&D claim review, but items that are eligible under one stage may not be eligible under another. Architects can use sampling approaches that minimise the disruption to the business when preparing an R&D claim, but they need to be tested thoroughly to ensure they’re statistically meaningful. Failing to do so could lead to a material overstatement of the claim that may cause an enquiry from HMRC, or conversely, this approach could lead to work being overlooked.
For example, regulation is constantly changing and it is likely that the first few buildings dealing with a major change in regulations would involve eligible R&D. But over time, this design work becomes common and the amount of eligible work will decrease. Architects should review their claim methodology each year and remain open minded about refreshing their assessment strategy. If an inspector asks a question about your claim, you need to be able to justify the individual project rather than presenting assumptions based on previous claims.
2. Know the difference between science and the arts
Architects should take extra care when the challenges within a project relate to social sciences or the arts. In the creative sector, technology and the arts can become intertwined and the R&D claim needs to exclusively focus on the technology strand of the project. When an architectural practice carries out extensive research as part of a project, it does not always mean that the work qualifies for R&D.
For example, researching the architectural language used in a specific location will not be eligible for R&D in the tax context, as it is not related to a field of science or technology. If you face uncertainties due to the complexity of working with a variety of people, this will also not be eligible.
4. Don't forget about claiming for collaborate work
Architects and designers often require the expert advice of manufacturers and other professionals in order to find the optimal product or material to achieve the desired finish for a project and this collaborative work with third party professionals is essential to product development.
In order for you to determine if your contribution to the project is eligible to claim for R&D, you should first establish the technical ownership of the work. Consider whether the third party brought the product to you, or if the product was created as a result of the collaborative work between both parties. Also determine who was actively involved in the resolution of the technical uncertainties. If your design team was involved in the specification, testing and proving of the new product, this indicates that you were directly involved in the R&D work and therefore you would be able to claim for these activities.
In order to claim successfully for collaborative work, we recommend that you record evidence of the technical ownership and when possible time-bookings with details of the work carried out by the designers in your team. Then when it comes to preparing your R&D claim, these records will facilitate in determining what work should be included.
5. Go beyond cosmetic and aesthetic effects
Legislation states that aesthetic aspects are not, of themselves, science or technology. So the work architects do to improve or generate an aesthetic appeal of a process or material is not considered R&D for tax purposes. However, if this aesthetic finish was not readily achievable or if it was accomplished through the application of science or technology, it could represent a qualifying advance.