R&D Tax Credits - Scientific or Technological Uncertainty

R&D Tax Credits - Scientific or Technological Uncertainty

Background

Like the Scientific or Technological Advance, many competent professionals (a.k.a. the company's technical experts or scientists) have preconceptions about what the term 'Technological Uncertainty' (or 'Scientific Uncertainty') mean.
HMRC's BEIS guidelines define the Technological Uncertainty regarding a competent professional, who is somebody with a good understanding of the scientific or technological details of a project and is up to date with the latest knowledge from the industry.
We will take a look at the precise HMRC guidelines and analyse what this means below.

BEIS Definition

"Scientific or technological uncertainty exists when knowledge of whether something is scientifically possible or technologically feasible, or how to achieve it in practice, is not readily available or deducible by a competent professional working in the field. There are various forms of Uncertainty, including System Uncertainty, where Scientific or Technological Uncertainty will often arise from turning something established (as scientifically feasible) into a cost-effective, reliable and reproducible process, material, device, product or service."
The BEIS guidelines also reference another common form of Scientific or Technological Uncertainty 'Systems Uncertainty'.

Analysis

Technological Uncertainty occurs in the scenario where an experienced professional cannot easily deduce a solution using existing knowledge or information that is readily available in the public domain.
So, it could be that you don't know whether it is even possible to achieve the advance, or that you don't know what the best way would be in practice to accomplish the Advance.
It is vital that the uncertainty be directly related to scientific or technological concerns. Hence a commercial, business or functional challenge would not itself count as Scientific or Technological Uncertainty.

Software Development Example

For example, in software development, it is often uncertain how to develop a new business requirement. Business requirements themselves are often seen by HMRC as representing functional uncertainty and would not qualify as R&D for Tax purposes in this form (without there also being a Technological Uncertainty).
However, to adhere to these business requirements the company may need to develop new algorithms - for which it is uncertain how to achieve a low-latency processing time. This Uncertainty could be owing to the volume of processing required and the difficulty splitting into smaller concurrent workloads.

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