HMRC R&D eligibility tool: how to use it

HMRC have introduced a tool to help you check your eligibility for R&D tax reliefs. You can use it to get clarification on which of your projects qualify, check what kind of information and evidence you need to include in your claim, and see if your work qualifies as R&D.

Once you’ve completed this, Alexander Clifford’s R&D tax relief eligibility review can show you how much you could be entitled to. Our short form analysed by specialists offers a quick, accurate result.

What is HMRC’s new R&D eligibility tool?

The HMRC R&D eligibility tool has been built by HMRC and the Department for Science, Innovation and Technology (DSIT). It helps your business assess whether your projects involve qualifying R&D activities. The tool’s results are only for guidance, indicating how closely your answers align with the R&D tax relief eligibility criteria. 

HMRC’s R&D eligibility checker can help you simplify the early stages of your R&D claim process by helping you decide if the work your business does meets the Guidelines for Compliance (GfC3) definitions of an advance, uncertainty and systematic investigation.

Our R&D eligibility review uses a similar framework, but allows you to have this analysed by an R&D expert who can assess HMRC’s criteria in more detail.

How does the eligibility checker tool work?

HMRC’s R&D eligibility checker takes 5-10 minutes, and runs through yes or no questions that focus on your purpose, uncertainty, and experimental approach. Each answer shapes your next question, with a final outcome of how likely your project is to involve qualifying R&D.

The HMRC R&D eligibility tool will ask for:

• A summary of your project spec and objectives
• Input from a ‘competent professional’ who led or oversaw the work
• Evidence of your scientific or technological uncertainties
• A description of your systematic approach to experimentation
• Records of your expenditure and staff time

Evidence checklist before you use the tool

Make sure you can prove your R&D tax relief eligibility with:

• Technical reports or prototypes – that prove your work in experimentation 
• Notes showing how your uncertainty was approached – it helps to keep contemporaneous documents (record as you go)
• Details of qualifications for your competent professional – to show their expertise in the field
• Data logs, tests or design documents – records of your R&D activity
• Payroll or timesheet evidence for R&D staff – to prove your staff salary or wage expenses

Our R&D eligibility checker mirrors this process, and gives you the option of a manual review by an R&D tax credit specialist who can offer deeper insight. We’ll help you understand the new merged R&D scheme and the latest HMRC guidance.

Understanding the results – what does my eligibility outcome mean?

The HMRC R&D eligibility tool will offer you one of two outcomes:

‘Likely involves R&D activities’

If you receive this result, your project aligns well with R&D tax relief eligibility and you can likely make a successful claim. Save these results as evidence of your R&D claim process, and prepare supporting documentation. 

Our consultants can then validate your results through a detailed R&D tax relief eligibility review, confirming financial and technical fit before you file your claim.

‘Not enough information’ or ‘Unlikely to qualify’

These outcomes often arise when R&D eligibility checker responses lack detail or omit the competent professional’s input. Many legitimate projects get this result because of missing evidence or unclear explanations.

Submitting your project for a manual review through our free eligibility checker ensures a human specialist reassesses your case using the HMRC guidance and GfC3 framework.

What are the limitations of HMRC’s eligibility tool?

While it can be helpful to get HMRC guidance, the HMRC R&D eligibility tool is limited. It doesn’t evaluate cost eligibility or project financials, can’t confirm claim acceptance or compliance under audit, and doesn’t review supporting documents or experiment records.

The R&D eligibility checker doesn’t:

• Work out which project costs are eligible – the tool can’t assess which projects qualify and which don’t
• Estimate the potential value of your R&D claim – the checker can’t calculate your estimated tax credits payout
• Pinpoint expenses that meet HMRC’s qualifying criteria – you won’t get insight into your qualifying expenses
• Take the place of the Additional Information Form (AIF) – you still need to submit an AIF
• Act as an alternative to expert R&D tax guidance – HMRC’s R&D eligibility tool won’t advise you the way an expert can

These limitations mean the HMRC R&D eligibility tool should be used only as a starting point. Our expert-led R&D tax relief eligibility review goes further by assessing your project manually against HMRC guidance, guidelines for compliance, and the expectations of a competent professional reviewer.

What should first-time claimants know? – the claim notification form (CNF)

From 1 April 2023, first-time claimants, or businesses who haven’t claimed within the last three accounting periods, must submit a claim notification form. This needs to be filed within six months of the end of your accounting period. This is a legal requirement under the merged scheme and ensures HMRC are aware of your intention to claim.

Our claim notification form guide can help you understand the form, deadlines and how to file.

Examples of outcomes from the HMRC eligibility tool, and how they compare

 

Software development

A software startup developed a new algorithm to optimise data processing. The HMRC R&D eligibility tool confirmed that this ‘likely involves R&D’, as the project demonstrated clear uncertainty and systematic experimentation.

Our manual R&D tax relief eligibility review analyses technical information, documentation, testing evidence, and developer input to ensure full compliance with HMRC guidance and DSIT standards.

Engineering and construction

A clean tech manufacturer redesigned piling rigs to improve energy efficiency. HMRC’s R&D eligibility checker gave a positive eligibility outcome, as the work offers an advance in the industry.

Our team analyse CAD drawings, test logs and staff time records, to confirm if work involves a genuine technological advance led by a competent professional.

R&D eligibility checker – FAQs

 

Why has HMRC created the R&D eligibility review tool?

HMRC launched the new R&D eligibility tool as part of its broader goal to cut fraud and errors, simplify the scheme, and help genuine innovators self-assess R&D tax relief eligibility before submitting claims, lowering compliance costs for both HMRC and claimants.

Can I rely on the HMRC eligibility tool for my R&D claim?

No. The HMRC R&D eligibility tool can give you a good idea of whether you’re eligible, but it can’t be taken as a definite or legally-binding approval. Your claim will still be assessed, and you’ll be given an outcome after submission.

Why do you need a competent professional to claim R&D credits?

HMRC stresses that a ‘competent professional’ must answer key technical questions. This means someone with the expertise, knowledge, and qualifications in the industry to identify scientific or technological advances and uncertainties. This could be your technical director, lead developer, or chief engineer.

Does it guarantee my claim will be accepted?

No. HMRC will perform a more thorough R&D eligibility review of your claim based on compliance evidence and documentation. The R&D eligibility checker only provides a rough estimate as to whether you qualify for tax credits.

What’s the difference between HMRC’s tool and Alexander Clifford’s eligibility tool?

Alexander Clifford’s R&D eligibility checker uses the same framework as HMRC’s checker, but gives you an estimated figure, and the opportunity to move forward with a manual review, financial analysis and claim preparation by specialists. You can get a more detailed financial estimate with our R&D tax credit calculator.

Should I save the R&D eligibility checker results for my claim submission?

Yes. HMRC recommend that you keep a copy of your outcome as evidence of your pre-assessment process for audit purposes. Keep it in a secure place. While it’s not a guarantee, you can use it as evidence that your project meets HMRC-approved criteria.

What are some common pitfalls when using the R&D eligibility checker?

When using HMRC’s R&D eligibility review, avoid not keeping records, getting your finance team to answer the questions, and misunderstanding the difference between an advance for your business and an advance for your industry.

Get a free R&D tax relief eligibility review

The HMRC R&D eligibility tool is a valuable piece of government-backed insight, but it can’t offer personalised, expert insight.

Our free R&D eligibility review combines technology, thorough reviews and a human eye, to ensure full compliance with HMRC guidance, DSIT definitions and GfC3 standards.

Submit your project for a free, no-obligation R&D eligibility review. You’ll receive personalised feedback from an R&D tax specialist within 24 hours.