RD Relief
R&D Tax Credits - Appreciable Improvement Definition
The software underpinning RDRelief was sold to one of the big-4 professional service firms in 2018. Consequently, the brand is no longer in operation.
- R&D Tax Advisors are invited to find out more about the Inspired.tax claim preparation software.
- Otherwise, please feel free to continue to browse this website for useful information regarding claiming R&D Tax Credits in the UK. However, beware that none of the information has been updated since 2018.
Contents
Background
HMRC require more than a routine scientific or technological improvement, but what exactly is meant by an appreciable improvement?
BEIS Definition
"Appreciable improvement means to change or adapt the scientific or technological characteristics of something to the point where it is 'better' than the original. The improvement should be more than a minor or routine upgrading and should represent something that would generally be acknowledged by a competent professional working in the field as a genuine and non-trivial improvement. Improvements arising from the adaptation of knowledge or capability from another field of science or technology are appreciable improvements if they would generally be acknowledged by a competent professional working in the field as a genuine and non-trivial improvement."
"Improvements which arise from taking existing science or technology and deploying it in a new context (e.g. a different trade) with only minor or routine changes are not appreciable improvements. A process, material, device, product or service will not be appreciably improved if it simply brings a company into line with overall knowledge or capability in science or technology, even though it may be completely new to the company or the company's trade."
"The question of what scale of advance would constitute an appreciable improvement will differ between fields of science and technology and will depend on what a competent professional working in the field would regard as a genuine and non-trivial improvement."
Analysis
Typically a small change or a bug fix would not qualify as an appreciable improvement, but sometimes the boundary becomes grey when you get into the bounds of more significant defects and more complex improvements. This is why the determination ultimately boils down to the judgement of a competent professional in the field, who (often with the guidance of professional advisors - and/or sophisticated R&D software), who can provide examples from similar fields of science or technology.