What Counts as R&D — and How to Prove It

Whether you’re claiming an R&D tax credit in Canada, the UK, the US, France, or Australia, the rules rhyme. The headline rates and forms differ, but the definition of R&D is remarkably consistent — and so is the thing that makes or breaks a claim: evidence.

The common definition

Across regimes, qualifying R&D is work undertaken to resolve scientific or technological uncertainty — a problem whose solution isn’t readily deducible by a competent professional in the field. The work is experimental: you form a hypothesis, test it, and iterate, because the outcome genuinely isn’t known in advance.

That framing rules things in and out fairly predictably:

• Usually qualifies: developing a new material, process, or device where the technical feasibility is uncertain; overcoming a performance limit no known method achieves; integrating technologies in a way that isn’t routine.
• Usually doesn’t: routine engineering, styling, or configuration; market research; work where the only uncertainty is commercial, not technical; applying known methods to a known outcome.

A useful test for the deep-tech case: ask your engineers whether the technology had been proven in practice before you started — not whether the product would sell. The uncertainty that counts is technical feasibility, not market success.

What’s typically eligible to claim

Once an activity qualifies, the costs that usually count include:

• Staff time spent on the qualifying work — generally the largest component.
• Contractors and subcontractors doing R&D on your behalf (often at a reduced rate).
• Materials and consumables used up in the research.
• Cloud and compute costs, in a growing number of regimes.

The exact boundaries vary by country, which is why the same project can yield a different claim in different jurisdictions — but the shape of eligible cost is consistent.

The part everyone underestimates: evidence

Here’s what separates a clean claim from a risky one. The credit isn’t earned by doing R&D — it’s earned by being able to show you did R&D, with records made as the work happened:

• What technical uncertainty each piece of work was resolving.
• Who worked on it, and for how long.
• When the experimental phase started and ended.
• How the uncertainty was ultimately resolved — or wasn’t.

Tax authorities have tightened scrutiny in nearly every jurisdiction. A claim backed by contemporaneous evidence survives an audit; one reconstructed from memory at year-end — estimated timesheets, after-the-fact narratives — is where claims get reduced, denied, or clawed back.

Why contemporaneous beats reconstructed

The problem with reconstructing evidence is that the most important details are exactly the ones memory loses: which two weeks the team spent stuck on a feasibility problem versus shipping routine features, who actually worked the experimental path, when the uncertainty resolved. Those distinctions decide what’s claimable — and they’re invisible by the time you’re filing.

This evidence usually doesn’t live in your accounting system. It lives in your delivery record — the tickets, branches, and activity of the people doing the work — captured automatically as it happens, not transcribed later. The companies that claim cleanly, in any country, are the ones whose proof was a byproduct of doing the work, not a year-end archaeology project.

That’s the universal requirement behind every program in the R&D tax credits by country guide: the rules differ, the need to prove it doesn’t. For a practical, step-by-step way to build that proof, see how to document R&D for a claim.