Can I claim R&D tax relief on a failed project?

If your claim meets HMRC’s eligibility criteria, you can still make an R&D tax relief claim even if the project itself was unsuccessful. The outcome of the work does not determine eligibility for claiming R&D for tax purposes. The decision is made on whether the project involved genuine research and development activities that aimed to resolve scientific or technological uncertainties.

For a project to qualify for R&D tax credits, you must be able to clearly demonstrate that the project sought an advance in science or technology and involved attempts to overcome those uncertainties. One key point to keep in mind is that they should not have been easily resolved by a competent professional using existing knowledge or standard techniques.

In many cases, failed projects can help illustrate the experimental and innovative intention of the work. When a project does not achieve its intended outcome, it may clearly show the level of uncertainty involved and the effort required to attempt new technical approaches. This can help demonstrate that the work went beyond routine development or standard problem-solving.

What matters most is that the project followed a process of investigation, testing, and evaluation in order to try to resolve the scientific or technological uncertainty encountered. If those activities meet HMRC’s definition of qualifying R&D activity, the eligible expenditure may still be included in an R&D tax relief claim.