Navigating the "Get Onboard" FTT Ruling and Its Impact on UK R&D Tax Claims

The recent First Tier Tribunal (FTT) decision in the "Get Onboard Ltd." case has created ripples across the R&D tax credit landscape in the UK. The ruling provides clarity and challenges certain practices of HMRC, especially in how claims are assessed and disputed. This landmark case holds particular relevance for businesses navigating HMRC enquiries and striving for a fair evaluation of their R&D efforts.

What Was the Case About?

Get Onboard Ltd. (GOL), a software company, developed an innovative AI system for Know Your Client (KYC) verification. HMRC contested the claim, arguing that the project merely used existing technologies and did not constitute a meaningful advance. However, the tribunal sided with GOL, finding that the integration of existing technologies to achieve a new capability or address technical uncertainties can qualify as R&D under the guidelines.

Key Takeaways from the Ruling

1. Evidential Burden on HMRC

The tribunal emphasised that once a company provides sufficient technical evidence of R&D activities, the burden shifts to HMRC to substantiate its objections. This could lead to fewer arbitrary rejections and require HMRC to provide more rigorous evidence in disputes.

2. Competence of Professionals

The case expanded the definition of a "competent professional" by acknowledging expertise based on experience rather than solely formal qualifications. This interpretation could benefit businesses relying on industry specialists who lack formal credentials in their field.

3. Use of Existing Technologies

The ruling highlighted that leveraging existing technologies does not disqualify a project if it addresses a technical uncertainty or contributes to new knowledge. This is particularly important for sectors like software development, where innovation often builds on established tools.

Implications for R&D Claimants

The decision underscores the importance of preparing robust technical documentation that clearly articulates how a project meets R&D criteria. Businesses should:

• Work with qualified professionals to present claims effectively.

• Provide detailed evidence of the innovation and technical challenges involved.

While the FTT ruling does not set binding case law, it sets a persuasive precedent that could influence future decisions.

Conclusion

For companies engaged in R&D, this ruling offers renewed confidence in submitting claims. It also signals the need for preparation and the ability to defend claims effectively during enquiries. Businesses navigating this evolving landscape will benefit from consulting a specialist to align with the latest guidance and safeguard their claims.

For further information on how the ruling could affect your claims or to seek professional advice, consult trusted R&D tax credit advisors. This case reinforces the importance of staying informed and proactive in managing compliance with HMRC guidelines.