Working out which projects you want to claim for is like building the skeleton of your claim; if you don’t decide on these to form the basis for your claim, your narrative will likely be meandering and tricky for the inspector at HMRC to understand – and therefore more likely to raise an inquiry.
To avoid this happening, the key with defining this section is to remember what your teachers intoned to you at school: plan, plan, plan. If you take the time to reflect on the projects you want to claim for in advance, then it will be much easier to objectively see what you want to outline and focus on, making your technical narrative much stronger than had you dived headfirst into it.
What defines a project? Could be a single product, major features or major challenges in the build.
Typically, a claim will cover more than one project. However, the word “project” can mean a lot of things depending on the context. A “project” might be a whole product, as delivered to the market. For example, a project could be Microsoft Word. Another one could be Microsoft Internet Explorer. Another one could be Microsoft Outlook.
Alternatively, it can be the case that all the R&D developments of a company fall under a single outside facing product. Then, “project” changes meaning to focus on major features or major challenges while developing that product. For example, Microsoft might have had a project going on to add built-in support for PGP to Outlook, and another to add support for easily adding GMail accounts, and yet another one to update part of the application to use some new Windows APIs, and yet another to extract that dependency on APIs to a common interface to make it easier to port Outlook to the Mac. These are all also “projects”.
Keep it simple: focus on about 1-3 projects in a claim.
So what definition of “project” is correct? It depends on your business, on what you’re claiming. The definition of “project” basically represents a granularity of detail. Generally, you want to set the detail level so that you end up with 3-5 projects, and cover 1-3 of them at most in a claim. It’s also reasonable to cover a single project, so long as that’s a good presentation of what actually happened.
Why not cover everything at the maximum level of detail? For two reasons:
You have better things to do than write a novel about your R&D. Like doing R&D, for example.
HMRC inspectors are also very time-constrained and even if you write that novel, they don’t have the time to read it.
The ideal level of detail is one that produces a technical narrative that lasts about 2-5 pages of A4. More than that, and the HMRC inspector will either start skimming, or start getting annoyed, or both. Less than that, and the claim may still pass, but it is likely to raise an eyebrow (in other words, it increases the risk of HMRC inquiry, which as we’ve established is highly undesirable). In our experience, 3-5 projects produces the desired length, and 3 is often sufficient. A single project can do as well, but then it needs to have a lot of meat to it.