If you've successfully claimed R&D tax relief once, the natural temptation is to dust off last year's submission, update a few figures, and send it back to HMRC. After all, your company is probably still doing similar work, tackling similar problems, and employing similar people. Why reinvent the wheel when you've already done the hard work of articulating your innovation once?
Unfortunately, very little can be reused year on year. While that might sound frustrating, there are very good reasons why taking shortcuts will only harm your claim in the long run. Understanding why each year's claim needs fresh thinking and careful documentation is fundamental to maintaining a strong, defensible position with HMRC.
This guide walks you through what changes between R&D tax credit claims, why HMRC expects to see evolution in your submissions, and how to approach each year with the rigour it deserves.
Key takeaways
- Uncertainties should evolve year on year: resolved problems can’t be claimed again and uncertainties from the last year must change based on the work already done.
- Advances in knowledge should show annual progression, unless you are still working to.
- Project descriptions must reflect the specific work carried out during the accounting period.
- Costs must match actual expenditure, so make sure you review staff time splits and subcontractor costs each year.
- Similar-looking claims are only legitimate if each instance represents a distinct R&D effort, clearly described.
Why can’t you simply reuse last year’s claim?
The core principle underpinning R&D tax relief is that you’re claiming for genuinely uncertain, novel work that pushes the boundaries of what’s already known in your field. By its nature, R&D moves forward. Each year brings new challenges, new approaches, and new outcomes.
Think about it from HMRC's perspective: identical technical descriptions across multiple years, with the same uncertainties, same approaches, and same language, raise an immediate red flag. It suggests routine development work rather than genuine innovation. Are you genuinely doing R&D each year, or are you simply repeating routine development work that happened to qualify once but no longer meets the bar?
Each accounting period is a distinct snapshot of your R&D activities, with its own technical challenges, advances in knowledge, and qualifying costs. Your R&D tax credit claim needs to reflect these changes to continue to qualify.
You should always review your R&D team’s activities to ensure that they continue to meet HMRC’s definition of R&D.
How should your uncertainties change each year?
Scientific or technological uncertainties are the heart of any R&D claim. They’re the justification for why your work qualifies. If you can’t demonstrate genuine uncertainty that couldn’t be readily resolved by a competent professional in your field, your claim fails at the first hurdle.
The crucial point is that these uncertainties should change each year. If you resolved an uncertainty in year one, you can’t claim for the same uncertainty in year two. You’ve already solved that problem. What you can claim for is the next set of challenges that arose as a consequence, or new obstacles that emerged as the project progressed.
In some cases, your uncertainty may not have been resolved at the end of the year. Perhaps you began the project late in the accounting period, or the challenges run more difficult than anticipated. However, you still need to explain how those challenges have evolved after the experimentation you have already completed.
Example: A software company building a real-time data processing platform
Consider a software company developing a real-time data processing platform.
- Year one uncertainty: Can existing algorithms process the required data volume within acceptable latency limits? The team experiments, optimises the code, and achieves its performance targets. Uncertainty resolved.
- Year two uncertainties: Scaling to multiple concurrent users creates unexpected bottlenecks. Integrating with legacy systems requires novel compatibility solutions. Encryption methods haven’t been implemented at this scale before.
The key is specificity. Don’t write “we faced challenges optimising algorithm performance” in both years. Year one describes challenges with data volume and latency; year two addresses scaling. If year one relates to latency challenges that are not solved in the year, you should describe how you the data volume uncertainty has evolved, perhaps by inching closer to the targeted metrics or by explaining the new routes you’re following.
The more specific you are about what changed and why it required genuine R&D, the stronger your position.
Can you claim for the same advances in knowledge twice?
It’s important to reevaluate your advances every year you make a claim; this goes for every aspect of your claim.
However, though your uncertainties will evolve based on the work you do within the period, your advance may remain the same even as the R&D activities evolve.
HMRC’s guidance requires you to seek a scientific or technological advance. This advance may continue across multiple periods if you don’t achieve the advance you’re after in the first period. Equally, the advance you’re seeking could evolve year on year, as your R&D activities reveal more and further narrow your goals.
Using a software example, year one might advance understanding of how particular data structures perform under high-load conditions, leading to a novel caching strategy. Year two may then build on this, perhaps advancing knowledge of distributed caching across multiple servers, or developing new methods for cache invalidation that maintain data consistency while maximising performance.
Equally, your uncertainties may still revolve around the same advance each year. If you didn’t manage to establish the performance metrics you were seeking under high-load conditions, you might continue to work towards that same advance in the next period.
The key thing is not to assume the advance stays the same; check with your team and establish if they were still looking to achieve the same improvement or novelty or if their goals had changed in the period.
What should your project descriptions include?
Each year, you need to submit an Additional Information Form with your claim. This will include company information and details of your costs, but also a description of how your projects qualify for R&D tax credits.
These project descriptions need to provide the following information:
- The main field of science or technology
- The baseline level of science or technology
- The advance in scientific or technological knowledge
- The scientific or technological uncertainties
- How your project seeks to overcome these uncertainties
Your project descriptions should paint a clear picture of what your team actually did during the specific accounting period. Generic descriptions that could apply to any year won’t cut it. HMRC expects detail, specificity, and a clear sense that this description relates to this period and no other.
Think about how your projects evolved. Ask yourself:
- Did you pivot your approach after early tests failed?
- Did you discover unexpected problems that required additional research?
- Did you complete one phase and move on to another?
All of this context belongs in your claim, because it demonstrates that this is genuine R&D activity with the uncertainties, setbacks, and breakthroughs that characterise real innovation.
How do qualifying costs change from year to year?
This is the most obvious area where claims must differ each year. Unless your company is remarkably static, your qualifying expenditure will change. Staff costs fluctuate as people join, leave, receive pay rises, or change the proportion of time they spend on qualifying work. Subcontractor and externally provided workers depend on when and how you engage external support.
Staff costs in particular deserve careful review. If someone spent 60% of their time on R&D last year, don’t assume it’s still 60% this year without checking. Review timesheets and/or team estimates to confirm the actual split. If your work has shifted from research-heavy to implementation-heavy, the qualifying proportion might decrease, even if the person is working on the same project.
Every pound claimed must be traceable to actual expenditure during the accounting period.
HMRC may be concerned if your R&D expenditure fluctuates significantly. If your R&D expenditure has increased significantly, that's worth highlighting in your claim, along with an explanation of why. Perhaps you hired additional researchers, or ramped up a particular project, or invested in new equipment. If expenditure decreased, there may be perfectly valid reasons, such as a project completing or a shift towards less capital-intensive work.
When is it acceptable to have similar claims year after year?
It is never acceptable to have annual copy-and-paste claims, but some fields see lots of similar projects, both concurrently and year after year.
Companies in highly regulated industries, for instance, might face similar compliance and testing requirements for each new product they develop. A medical device manufacturer creating different diagnostic tools will encounter biocompatibility testing, clinical trials, and regulatory submissions for each device.
In such cases, the key is to demonstrate that while the type of challenge is similar, each instance represents a distinct R&D effort. You’re not claiming for the same work twice; you’re claiming for similar work on different products. Your descriptions need to make these distinctions absolutely clear, between the uncertainties and the advances.
For example, rather than writing “we developed a diagnostic device” across three projects, your claims might specify:
- Year one: A rapid antigen test for Disease X, facing uncertainties around achieving 95% sensitivity with a five-minute turnaround time in point-of-care settings.
- Year two: A lateral flow assay for Disease Y, where the challenge centred on reducing cross-reactivity with related pathogens.
- Year three: A multiplexed diagnostic panel, where novel signal detection methods were needed to distinguish between four simultaneous targets.
You may even wish to spell out the differences between projects if they occur at the same time. This level of specificity protects you and shows HMRC that you understand the difference between legitimate similarity and inappropriate duplication.
What are the risks of copy-and-paste claims?
HMRC might not scrutinise your claim in detail when you first submit it. But if they ever open a compliance check into your claim, previous claims may be reviewed alongside the current one. Patterns of duplication become immediately obvious. At that point, you’re faced with uncomfortable questions.
The burden of proof sits with you. HMRC doesn’t have to prove your claim is wrong; you have to prove it’s right. Copy-and-paste claims make that burden much harder to discharge, because they suggest carelessness at best and fraud at worst. Even if your underlying R&D work was legitimate, poorly prepared claims can result in disallowances, penalties, and lasting damage to your relationship with HMRC. Best case scenario, you spend unnecessary time and resources preparing a robust response across many months to justify your claim to HMRC.
How do you build a stronger year-on-year claiming process?
The solution is to build a robust process that starts from scratch each year while learning from previous experience. Practically, this means:
- Keep an R&D log throughout the year. Have project leads note technical challenges, experimental results, and breakthroughs as they happen. This creates a contemporaneous record that makes claim preparation far easier and more accurate.
- Use last year’s claim as a benchmark, not a template. Establish where you left off in your last claim and what new information you’ve learned in the last accounting period.
Fresh claims, based on solid records and clear thinking, stand up to scrutiny. Recycled claims create risk, waste time in enquiries, and potentially cost you money in disallowed relief.
Tax Cloud is your best friend when it comes to making annual claims. With our team of R&D tax experts reviewing your claim at each stage, you never have to worry about whether your advances or uncertainties meet HMRC’s requirements. If you want to discuss your claim, get in touch with our team.
