A question we are regularly asked by our clients is how can we provide evidence that something “the company was seeking to overcome was not already resolved or that such resolution would not be available to a competent professional working in the field”. How can you provide evidence of something that doesn’t exist?

We hoped when the guidelines were updated in 2015 that this might clarify the situation further however in 8.1 The Science Test item e it purely states  “for example, evidence that a comprehensive literature review to determine the current stats of scientific or technological knowledge in the area has been conducted prior to commencing the project”. Again how can you provide evidence of something that doesn’t exist?

On challenges to this point in audits, we have been provided with examples from academic paper with a list of published sources on topics. Again, how can you provide this if there is nothing in the public domain as the information is either completely novel or not in the public domain perhaps due to commercial sensitivities?

If you have too much time on your hands you can indeed find numerous philosophical articles about the evidence of absence and the fact that you can prove a negative. One favourite being: If you look for “X” and don’t find it, does that prove that there is no “X”? No, but the more you look in places where X “ought to be” in ways and at a time that X “should be likely to be there”, the more confidence you have that there is no “X”.

Braithwaite continues to strive for further clarity and guidance from Revenue on how to meet this particular criteria of the R&D Tax Credit Science Test. In the meantime, we suggest that a company keeps dated screenshots of searches for pertinent words relating to their developmental activities as records of this requirement. We will continue to search for “X”.