Determining the start and end dates of an R&D activity is essential to the preparation of a compliant R&D tax credit claim, as this can define the boundaries for the inclusion of eligible expenditure. Ken Hardy and Damien Flanagan of our R&D Incentives team explain the documentation required and the lifecycle of an R&D project below.
Costs incurred after the R&D activity ends (i.e. after the uncertainties have been resolved) are not eligible for the purposes of the R&D tax credit.
Documentation
It is important to ensure a project’s objectives have been properly identified and articulated and that there is sufficient documentation to support all positions taken. The start and end dates of the project should be clearly evidenced by the supporting evidence. This is a particularly important point to consider where activities are at the borderline between R&D and commercial activities, such as user acceptance testing, validation activities and scale-up.
Examples of supporting documentation
- Project Initiation Document (PID);
- Gantt chart;
- Project charter;
- Statement of work;
- Status report;
- Budget;
- User requirements;
- Feasibility study;
- Etc.
Project lifecycle for the R&D tax credit
Start of project
The point at which the scientific / technological uncertainties are identified and/or at which work to resolve the uncertainty begins.
Project continues
The continued presence of a scientific / technological uncertainty and the systematic, investigative or experimental activities undertaken to resolve it.
End of project
The point at which the scientific / technological uncertainties associated with the project have been resolved.
Do you have an R&D-related query?
Contact us. If you would like to request an R&D tax credits brochure, require information on how we can assist your company, or would like us to call you directly to discuss your particular circumstances, please email us at info@kpmg.ie.
We will endeavour to respond to your initial query within two working days.
Ken Hardy
Partner
KPMG in Ireland
Damien Flanagan
Partner
KPMG in Ireland
