Mastering baseline research for R&D tax relief: A quick refresh for accountants

Author: jec-whisper-dev Published: 27^th February, 2025

Claiming R&D tax relief can be a game-changer for companies investing in innovation, but as many firms have discovered, navigating HMRC’s criteria isn’t always straightforward.

One of the biggest stumbling blocks? Establishing a clear and well-evidenced baseline.

HMRC doesn’t just want to see that your company has advanced its own knowledge – they want proof that the project represents an advance in science or technology.

Without this, even the most groundbreaking work could fail to meet the eligibility criteria.

So, how do you build a rock-solid baseline that meets HMRC’s expectations? Here’s how the best accountancy firms do it.

Understand what the baseline really is

A baseline defines the existing knowledge and technological capabilities in the field before the R&D work began.

Think of it as the starting point against which the technological or scientific advance is measured.

Put simply, if current engine efficiency is 12 mpg and the company has developed new technology that extends efficiency to 25 mpg, the baseline is 12 mpg, and your advance is a 13 mpg improvement.

However, here’s the catch – the project must go beyond just commercial benefits.

HMRC wants to see that the work contributes to the wider industry’s knowledge, not just the company’s, and generates new knowledge in the relevant area of science or technology.

Avoid the common pitfalls when establishing a baseline

Many businesses get tripped up when evidencing their baseline.

Here’s what should be avoided when conducting the baseline research:

Writing a sales pitch – HMRC isn’t interested in a flashy PR story filled with buzzwords. They want clear, technical, and factual evidence.
Assuming that new to the market = eligible R&D – just because a product or service is innovative doesn’t mean that the development qualifies as eligible R&D. New products could be developed using existing knowledge and techniques.
Focusing only on internal knowledge – HMRC expects companies to research what knowledge is publicly available before starting their project. If the information on how something can be done is readily available, there’s probably no eligible R&D, even if the company has to learn how to do it for the first time.

You can’t just “Google it”

HMRC does ask if a Google search has been performed, but this is only a good starting point. It’s rarely enough to establish a comprehensive baseline.

The reality is that many technological advancements never make it to mainstream search results. Scientific papers, patents, and industry reports often hold the real insights that define the state of the art.

If you want to prove what was already known before the project began, you need to dig deeper than just page one of Google.

Structure your baseline research

The very best firms follow a structured approach to gathering baseline evidence. Here’s how:

Industry research – Look at published papers, competitor products, patents, and technical reports to define what was known.
Technology review – Identify the key limitations of existing solutions and where your project pushes boundaries.
Clear comparisons – Clearly outline how the work goes beyond the known state of the art.
Technical, not commercial – Keep it scientific and technological, not a marketing pitch.

If HMRC can’t see how your project differs from what already exists, the claim may be at risk.

Let technology be your guide

Baseline research is the foundation of a successful R&D tax relief claim. Without it, firms risk under-evidencing their advance, or worse, facing an HMRC enquiry.

The key takeaway? HMRC wants clear, structured evidence that shows why an advance was needed and how your project delivers it.

That’s where WhisperClaims R&D tax software comes in.

Our platform guides firms through the baseline process, using structured questions based on HMRC’s latest guidance to help you build a robust claim – reducing unnecessary complexity.

Our solution can help to de-risk every stage of the R&D claim process and it’s backed up by our dedicated advice line and a thriving WhatsApp community of experts.

Start your free trial today and take the guesswork out of R&D tax relief.

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