A marine robotics and AI start-up's first R&D claim

Yes. Relief depends on carrying out qualifying R&D, not on having sales. This start-up was incorporated in November 2022, had one employee and no turnover yet, and still made a claim for its first accounting period, ended 30 November 2023, because its projects involved genuine technological uncertainty. The relief follows the work, not the revenue.

An underwater robot to monitor seaweed farms, a vision and detection robot using AI, and a data-driven farm operations platform at proof-of-concept stage. Each addressed a different technical challenge in making seaweed farming scalable and affordable. Early-stage projects like these still needed separate, credible technical descriptions, each setting out the uncertainty faced and how the team set about resolving it.

It refers to companies that spend a high share of their total expenditure on qualifying R&D. For this period the threshold was 40%, and the start-up exceeded it. Being R&D-intensive changed the relief available to it under the SME scheme rules that applied to that period. We check the intensity calculation carefully, because it changes the relief available.

The company had received grant funding in the period. It was identified and correctly taken into account in the claim. Under the SME scheme rules that applied, subsidised expenditure was restricted, so recognising grants accurately matters for the figures to be right and defensible. We also check the grant terms, since what a grant covers can affect which costs are claimable.

Capital expenditure does not qualify, so every cost had to be checked for whether it was a running cost of the R&D or the purchase of an asset. Reviewing it explicitly avoids including costs that HMRC would remove. Non-qualifying activities were also excluded explicitly. This review is a standard step in our process for every claim.

An independent check of the technical case by a specialist in the industry from our R&D network. It tests whether the projects stand up to someone who knows the field, which is the standard a competent professional is judged by. It is part of our Core claim. It is not a rubber stamp; it can lead to projects being amended or removed.

It describes early-stage work, where the concept has been shown to be feasible in principle but not yet developed into a working system. Early-stage work can still be R&D, because it is where the uncertainty often lies. What matters is that the uncertainty was resolved systematically. We explain this plainly in the report so HMRC can follow it.

No. The project's purpose, such as carbon capture or climate benefit, does not itself qualify it. What qualifies is a technical advance made by resolving scientific or technological uncertainty. The climate aim gave the work its context, but the technical uncertainty is what the claim rested on. We always describe the technical advance, not the benefit to the world.

A new company has no history for HMRC to compare against, so the claim has to speak for itself. Clear project descriptions, costs tied to the people and activities, and a record of what was tried help show the claim is genuine, particularly when HMRC has focused on first-time claims.