Why do most R&D tax relief claims fail the ‘competent professional’ test?

Competent professionals play a central role in qualifying R&D activity. They oversee the work and assess whether it meets HMRC’s criteria, based on the presence of scientific or technological uncertainty and the limitations of baseline knowledge. 

However, most R&D claims fail the ‘competent professional’ test because they lack focus on addressing the scientific or technological uncertainty. They prioritise commercial innovation which does not qualify for claiming R&D tax credits. 

In this article, we are going to be guiding you through some common areas where R&D claims fail the ‘competent professional’ test. 

What leads to misunderstandings of the competent professional role in R&D claims?

A common misunderstanding within the R&D claim process is the assumption that seniority or job title equates to competence under HMRC’s definition. However, this is not the case. 

A competent professional is defined by their knowledge and experience in a relevant field of science or technology. They must be able to identify genuine uncertainty and assess whether a solution is readily deducible using existing knowledge or established methods. 

HMRC expects a clear link between the competent professional’s expertise and the uncertainty being addressed, along with what was known or deducible at the outset. This distinction matters as many claims will position members working on the project, such as project managers or general engineers, as competent professionals without evidencing their technical depth in the specific field. 

In practice, the competent professional should be involved from the outset of the project. Their judgement should guide the technical approach as the work progresses. If the involvement of a competent professional only appears at the R&D tax credit claiming stage, it raises questions about whether the uncertainty was genuinely assessed at the time of the work undertaken. 

A competent professional may be highly skilled in one area of the project but not in another. An example of this would be for a software engineer to be highly skilled in front-end development but not when it comes to assessing uncertainty in distributed systems architecture. Claims need to reflect that level of detail rather than relying on vague descriptions. 

To strengthen this documentation, claims should clearly state areas such as:

• The individual’s relevant qualifications or experience
• Their role within the project
• How they identified and evaluated the scientific or technological uncertainty
• Why the solution was not readily deducible to them at the outset

Without this information, the “competent professional” becomes a label rather than evidence. 

Why do R&D claims fail to identify genuine uncertainty?

Another common pain point in the competent professional test is how uncertainty is defined. Many R&D tax relief claims refer to scientific or technological uncertainty, but they do not evidence the uncertainty in line with HMRC criteria. 

Qualifying uncertainty exists where a competent professional cannot achieve a desired outcome using existing knowledge or available methods. Genuine uncertainty must stem from the science or technology work involved, not from commercial or operational factors. 

Claims often refer to uncertainty that fall outside this definition. These include:

• Market challenges
• Cost constraints
• User requirements
• Aesthetic or design preferences

While these business considerations are valid, they do not qualify as genuine scientific or technological uncertainties. 

If a project is presented as if the solution appears achievable, with only minor obstacles along the way, this undermines the R&D claim. If the narrative suggests the outcome was predictable, it contradicts the requirement that the solution was not readily deducible. 

A further issue is the confusion between implementation and advancement. Using existing technologies in a new way can be innovative from a commercial perspective. It does not necessarily create uncertainty at a technological level. Claims need to separate routine integration from genuine attempts to resolve uncertainty. 

A clearer approach defines the uncertainty in precise terms. This could be explained in the following ways:

• What was not known at the outset of the project?
• Why could this not have been resolved using publicly available knowledge or methods?
• What alternative methods or knowledge were considered, and why were they insufficient?

When this level of detail is absent from the documentation, HMRC is likely to view the work as routine business development as opposed to qualifying R&D activity. 

How do generic narratives weaken R&D tax relief claims?

Even where qualifying activity exists, poor documentation can cause an R&D claim to fail the competent professional test. 

HMRC assesses evidence, not the intent. This means that the claim must show how a competent professional identified and addressed scientific or technological uncertainty in real time, based on the knowledge available at that point. 

A common concern in R&D claims is the use of generic or templated narratives. Generic or templated narratives rely on broad statements without explaining the specific uncertainties encountered or how they were addressed. This can risk weakening the credibility of the R&D tax relief claim. 

Another risk is the lack of contemporaneous records. While HMRC does not require formal documentation, it does expect some form of project-level evidence. This may include:

• Technical specifications
• Design documents
• Test results
• Internal communications discussing technical decisions

Without these, the claim relies on accounts created after the work was completed. This would more likely be challenged during HMRC’s review process. 

There is also a tendency to overstate or oversimplify. Some claims present the work as more complex than it was. Others remove too much detail in an attempt to be concise. Both approaches create risk in weakening the claim.

A strong narrative should:

• Follow the real-time sequence of the project
• Reflect the decision-making process of the competent professional
• Show how knowledge evolved over time
• Link activities directly to resolving uncertainty
• Refer back to the baseline knowledge available at each stage

Clarity carries more weight in an R&D claim than volume. A well-structured explanation of a single uncertainty is often more valued than a broad list of loosely defined challenges encountered. 

Why do R&D claims fail without R&D tax specialist input?

Preparing an R&D claim without specialist input can increase the risk that it does not fully align with HMRC requirements for clear, evidence-based documentation. This may lead to inconsistencies across projects, incomplete explanations or insufficient detail to support the position taken. 

The underlying work may still qualify as R&D, but the claim must demonstrate how the activity meets the criteria and how the expenditure relates to that activity. 

R&D tax credit specialists provide a comprehensive approach and support strategy for preparing structured claims. They apply HMRC’s criteria consistently and ensure that qualifying activity is described in a clear and coherent way. 

This includes:

• Identifying qualifying R&D projects
• Defining uncertainty
• Linking eligible expenditure to the work undertaken

Without this input, R&D claims can lack clarity or fail to address key requirements. Technical narratives may not clearly explain the uncertainty encountered during the project. This can make it more difficult to demonstrate that the work extends beyond existing baseline knowledge. 

That said, the technical substance of an R&D claim must always come from those directly involved in the work. A competent professional is responsible for defining the scientific or technological uncertainty and explaining how it was addressed. 

The role of the R&D tax credit adviser is to structure and present this information in line with HMRC guidance. 

A well-prepared claim brings both of these elements together. Clear technical input, supported by structured presentation, improves clarity and helps ensure the claim reflects the work carried out. 

Closing thoughts

At its core, the competent professional test is about credibility. It considers whether the claim reflects genuine technical decision-making carried out by individuals with the appropriate expertise. 

R&D tax credit claims often fall short where the link between the work undertaken, the scientific or technological uncertainty faced, and the competent professional is not clearly established within the documentation. 

This approach reduces the need for reconstruction and improves the overall quality of the R&D claim submission. 

In practice, R&D tax relief claims that clearly outline the role of the competent professional working on the project are more likely to align with HMRC’s qualifying criteria. The focus is not only on who is involved in the project, but how their knowledge was applied to identify and resolve the scientific or technological uncertainty. 

This includes defining the baseline level of knowledge, explaining why the uncertainty was not readily deducible using the applied knowledge and evidencing how decisions were made as the project progressed. Without this, the claim could risk appearing unsupported to HMRC during the reviewing process. 

Stronger R&D claims have shown that the competent professional was actively involved from the outset of the project and throughout. They define the baseline level of knowledge and explain why the scientific or technological uncertainty was not readily deducible using the available knowledge or methods. 

How can Alexander Clifford help?

At Alexander Clifford, our team of expert R&D tax credit specialists can give you a deeper insight into the role of a competent professional and how this role supports a well-evidenced R&D tax relief claim. Our 5-star rated services have supported hundreds of businesses across the UK with preparing clear, compliant R&D claims.

We take a structured and practical approach to R&D claims, working closely with your team to ensure the detail stands up to HMRC review. From initial assessment through to submission, our focus is on clarity, consistency and reducing risk, so you can approach your claim with confidence and a clear understanding of how it meets the qualifying criteria.

For more information regarding the role of a competent professional or R&D tax credits in general, please get in touch to speak to one of our advisers.