What if my R&D project runs over multiple years?

Many research and development projects stretch across multiple years. As long as the underlying activities remain eligible and the company continues to incur qualifying expenditure, a long-term project can form part of more than one R&D tax credit relief claim.

This means a project does not need to begin and end within a single claim period. Instead, the work carried out during each accounting period can be assessed based on the activity carried out within that time frame. If the activity still involves attempts to resolve scientific or technological uncertainty and sits beyond the company’s baseline knowledge, the relevant costs for that accounting period may be included in that R&D tax credit claim.

The same structured approach to documenting the project can be used throughout its lifespan. That said, submitting identical technical narratives or cost explanations each year is likely to raise questions. HMRC typically expects the technical description to accurately reflect the progress of the R&D activity, the uncertainties addressed during the accounting period, and any changes in the approach taken by the competent professionals who were involved in the project.

Accurate record keeping is therefore important. Technical notes, timelines of experimentation, and clear links between qualifying activity and eligible expenditure make it easier to support multi-year claims if HMRC raises an enquiry. Click here to understand the importance of accurate record keeping.