Reasonable care and governance in R&D claims: why it now matters more than ever
If HMRC reviewed your claim process today, could you clearly demonstrate reasonable care at every stage?
R&D tax relief is not just about eligibility.
It’s about whether the company has taken reasonable care in making the claim.
In today’s compliance environment, HMRC is not only assessing whether R&D took place, it is also reviewing how the claim was prepared.
“Reasonable care” is a core concept in UK tax compliance. In simple terms, it asks:
Did the company take appropriate steps to ensure the claim was accurate and properly supported?
In the context of R&D, that increasingly means:
1. Involvement of competent professionals
Was the technical narrative prepared with genuine input from those who actually undertook the work?
Or does it read like a templated summary produced without technical oversight?
HMRC expects companies to demonstrate that claims reflect real project knowledge.
2. Clear internal understanding of the rules
Does the business understand:
- what qualifies as technological uncertainty?
- the difference between commercial innovation and R&D?
- which costs are eligible and why?
Claims that misapply basic principles can raise governance concerns.
3. Cost traceability and review
- Were the financial schedules reviewed internally before submission?
- Is there a documented basis for staff time apportionment?
- Can the numbers be reconciled back to payroll and statutory accounts?
Governance isn’t about perfection; it’s about process.
4. Proportionate documentation
HMRC does not expect laboratory notebooks or academic papers.
But it does expect evidence that the company could explain:
- what it was trying to achieve
- why it was uncertain
- what was done to resolve it
If a claim cannot be defended without external advisers reconstructing it from memory, governance is weak.
5. Board-level awareness
Increasingly, directors are expected to understand the nature of the claims being submitted in the company’s name.
R&D relief is part of the corporation tax return. It carries the same compliance responsibility as any other tax position.
Strong governance doesn’t mean avoiding claims.
It means ensuring the claim reflects reality, is properly reviewed, and could withstand scrutiny if challenged.
Pause for thought
If HMRC reviewed your claim process, not just your claim, could you demonstrate:
- Who was involved in preparing it?
- What checks were carried out internally?
- How costs were validated?
- That directors understood what was being submitted?
In the current environment, governance is no longer an afterthought.
It is part of what makes a claim robust.
