What evidence and documentation is required for the R&D Merged Scheme?

When making an R&D claim under the Merged Scheme, businesses need to keep enough information to support both the qualifying R&D activities and the expenditure included in the claim. HMRC does not require companies to create a specific set of records solely for an R&D claim, but appropriate records should be kept to support the work carried out and the costs being claimed.

Some companies must also submit a digital Claim Notification Form before making an R&D claim. This can apply to first-time claimants and companies whose previous R&D claim falls outside HMRC’s specified three-year period. The notification period generally ends six months after the end of the relevant period of account. Companies should check whether the notification requirement applies, as failing to notify HMRC within the required period can prevent a valid R&D claim from being made.

The type of evidence available will depend on the R&D project and how the business operates. This could include: 

• Project plans and designs
• Technical documents
• Test results
• Meeting notes and communications between those involved in the project
• Photographs and notes of prototypes
• Other records created during the development process

These records can help demonstrate what the project aimed to achieve, the scientific or technological uncertainties encountered and the work undertaken to resolve them.

Businesses should also keep financial records that support the qualifying expenditure included in the claim. This could include payroll information, invoices, accounting records and documents showing how qualifying expenditure has been identified and calculated. Where costs have been apportioned between qualifying R&D and other activities, the company should be able to support the basis used for that apportionment. HMRC may ask to see these records as part of a compliance check.

As part of the claim, companies must also submit an Additional Information Form (AIF) to HMRC. This must be submitted digitally before the Company Tax Return containing the R&D claim. The form provides information about the R&D projects being claimed, including the field of science or technology, the advance being sought, the scientific or technological uncertainties encountered and how the project sought to overcome them. The form also requires information about the qualifying expenditure included in the claim.

The AIF must be submitted for each accounting period in which an R&D claim is made. Where the required Additional Information Form has not been submitted, the R&D claim will be invalid.

Keeping appropriate records throughout an R&D project can make it easier to identify qualifying activities and expenditure when preparing the claim. These records can also provide supporting evidence if HMRC later reviews the claim.