“We’re not really an R&D company.”
It’s one of the most common things we hear from founders, usually said by someone who’s spent the last six months building something nobody else has quite figured out yet.
R&D tax relief has an image problem. Say the words “research and development” and most people picture lab coats, test tubes, and university spin-outs. In reality, a huge amount of genuinely qualifying work happens in ordinary tech and fintech businesses, built by teams who never think to check whether what they’re doing counts.
Here are the three myths we hear every week, and what’s actually true instead.
Myth 1: You need a lab
R&D tax relief isn’t about the environment you work in. It’s about whether you set out to solve a technical problem where the answer wasn’t obvious or readily available, and had to work through genuine uncertainty to get there.
For a tech or fintech business, that could mean building a system that handles a scale or complexity nobody’s cracked in quite that way, integrating technologies that weren’t designed to work together, or solving a performance, security or compliance problem that required real technical trial and error, not just following a tutorial.
If your engineers have ever hit a point where they genuinely didn’t know if something was possible, and had to test their way to an answer, that’s worth a closer look.
Myth 2: It’s only for big companies
Some of the strongest claims we see come from small, early-stage teams, not established corporates with dedicated R&D departments. Company size isn’t the test HMRC applies. The nature of the work is.
In fact, smaller and younger companies are often better placed to claim, because HMRC’s scheme for SMEs is more generous than the one for larger businesses. A founder-led team of five, six months into building a genuinely novel product, can be sitting on a more valuable claim per pound spent than a much larger company doing similar work.
Myth 3: It’s too much hassle to claim
This is the myth that costs people the most money, because it stops the conversation before it starts.
Yes, a claim needs to be prepared properly, with a clear technical narrative explaining what the uncertainty was and how your team worked through it, alongside the underlying cost figures. That’s real work. But it’s work that happens once a year, over a matter of days, not months. Set against relief that can be worth thousands or tens of thousands of pounds, most founders find the maths isn’t close once they actually sit down and look at it.
The bigger cost, almost always, is the years of eligible work that quietly go unclaimed because nobody checked.
So what actually qualifies?
There’s no single checklist that covers every case, because eligibility comes down to the specific technical uncertainty involved, not the industry or job titles on your team. But as a general steer, it’s worth a proper look if any of the following sound familiar:
- Your team built something because an off-the-shelf solution genuinely didn’t exist or didn’t work for your use case
- You hit technical problems where the answer wasn’t obvious in advance, and had to test, fail, and iterate to solve them
- You’ve integrated, adapted or scaled technology in a way that wasn’t straightforward
- Competent people in your field would have found the problem genuinely difficult, not just time-consuming
None of these require a lab coat. They just require honesty about how hard the work actually was.
The real risk isn’t claiming wrongly. It’s not claiming at all
Founders are naturally cautious about claiming something they’re not sure they’re entitled to, and that instinct is a good one. But the far more common outcome we see isn’t an incorrect claim. It’s years of eligible work that never gets reviewed at all, because “R&D” sounded like something for someone else’s business.
If you’ve never checked, that’s the conversation worth having, not because every business qualifies, but because the ones that do are often surprised by how much they’d missed.
Final Thought
A quote from our Principal, Sunil Aggarwal:
“The founders who claim R&D relief aren’t the ones doing the most unusual work. They’re the ones who stopped to ask.
Every year we see businesses solving genuinely hard problems and assuming it doesn’t count because it doesn’t feel special from the inside. It almost always feels ordinary to the people who did it. That’s exactly why it’s worth checking.”
If you’ve ever wondered whether your team’s work could qualify, that’s a conversation worth five minutes of your time, whether the answer turns out to be yes or no.
Book an R&D eligibility review with DRS and we’ll give you a straight answer on whether your business is leaving money on the table.
- Email: info@drs-tax.com
- Telephone: 020 8059 1891
- Or submit an enquiry via our Contact Us page