The GRDF Assessment Methodology provides structured approach, aligned to each of the eight GRDF 2.0 steps, for conducting a Level 1 assessment of a potential R&D tax relief claim that ensures consistent and thorough scrutiny of all claim components.

This structured methodology can be used by professionals as a checklist or worksheet to document their review of an R&D tax relief claim.

For each GRDF 2.0 step, the methodology provides clear guidelines on who should be conducting the assessment and what key questions (each such question, an “Assessment Question”) the relevant professional (Assessor, Reviewer, and/or Certifier) should be asking to adequately complete the assessment under such step.

For each Assessment Question, the methodology explains in detail why such question needs to be assessed and how critical the outcome of such assessment is to the validity of the claim (or relevant project) in question.

Finally, the methodology outlines a decision-making structure for the outcome of each Assessment Question which provides a clear pathway for Pass/Fail outcomes while also allowing professionals the opportunity for escalation to a Level 2 assessment, as appropriate, to ensure claims (or relevant projects) are not rejected prematurely without further expert review.

Level 1 Assessment Questions and Acceptance Criteria

Specifications for Conducting the Assessment Required Under Each GRDF 2.0 Step

At the outset, the GRDF Assessment Methodology details the following specifications for undertaking a Level 1 assessment required under each GRDF 2.0 step:

● Recommended Expertise: This section specifies the expertise (Technical, Financial/Tax, and/or Compliance/Audit) the relevant professional (Assessor, Reviewer, or Certifier) must possess to lead and/or support the assessment necessary for such GRDF 2.0 step. It also provides the rationale for why such expertise is critical for such GRDF 2.0 step.

● Assessment: This section specifies the Assessment Questions that the relevant professional (Assessor, Reviewer, or Certifier) must assess to determine the validity of a potential R&D tax relief claim.

Assessment Questions Required Under Each GRDF 2.0 Step

The GRDF Assessment Methodology also provides a structured approach for assessing each of the Assessment Questions effectively and consistently.

● Category: Each Assessment Question falls into one of two categories – Mandatory Compliance or Discretionary Review – based on how critical its outcome is to the validity of the claim (or the relevant project). For Assessment Questions that have a Pass/Fail assessment outcome, this categorization determines whether the outcome is an automatic Pass/Fail or whether the Assessment Question can be escalated for a Level 2 assessment before making such determination.

● Guidance: This section provides critical background on each Assessment Question (relevant definitions and application regulations/guidelines), as well as guidance on the importance of the Assessment Question (why the question is being asked and why HMRC is interested in the outcome).

● Assessment Queries: This section details the facts and other information that the relevant professional must establish in order to reach an outcome for such Assessment Question.

● Acceptance Criteria: This section details what criteria must be satisfied for the outcome of such Assessment Question to meet the requirements of a valid R&D tax relief claim.

● Assessment Outcome: Some Assessment Questions (specifically in Step 5) have a quantitative outcome. Most, however, have a Pass/Fail outcome based on whether the Assessment Question has met the Acceptance Criteria required for the validity of the claim (or the relevant project).

Decision Making Structure for the Assessment Outcome of each Assessment Question

The GRDF Assessment Methodology categorizes most Assessment Questions (other than those that have a quantitative outcome in Step 5) into one of two categories to allow for a consistent decision-making structure for determining the outcome of each Assessment Question.

● Mandatory Compliance: Assessment Questions that must strictly adhere to the Acceptance Criteria, which represent essential thresholds for determining the validity of an R&D claim (or the relevant project). Failure to meet the stated Acceptance Criteria results in immediate disqualification of the entire claim (or relevant project) from further assessment. The relevant professional conducting the Level 1 assessment should terminate the assessment immediately and reject the claim (or relevant project) with documented reasoning.

● Discretionary Review: Assessment Questions where the Acceptance Criteria allow for expert interpretation or where technical or contextual complexity exists, and where eligibility may still be substantiated with further evidence or analysis. Failure to meet the stated Acceptance Criteria does not result in immediate disqualification of the claim (or relevant project) from further assessment. The relevant professional conducting the Level 1 assessment must use professional judgment, with documented reasoning, to determine whether to terminate the Level 1 assessment or to escalate the Assessment Question to a Level 2 assessment.

A Level 2 assessment, which falls outside the purview of the GRDF Assessment Methodology, involves an in-depth, expert-led evaluation triggered by specific issues identified during the Level 1 assessment.

The relevant professional conducting the Level 1 assessment must use professional judgment, with documented reasoning, to determine whether to terminate the Level 1 assessment or to escalate the Assessment Question to a Level 2 assessment:

● Escalate to Level 2 Assessment: If the issue could potentially be resolved with additional evidence or expert insight, the relevant professional conducting the Level 1 assessment should escalate the claim to a Level 2 assessment, requesting input from an expert in the relevant field (technical/scientific or tax/compliance).

● Exit the Level 1 Assessment: If the failure is material, meaning it significantly undermines the validity of the claim (or the relevant project), and cannot be remedied through further review, the assessor should exit the Level 1 assessment, documenting the reasons for rejection.

Depending on the nature of the issue, the Level 2 assessment will fall into one of two categories:

● Technical Review: For scientific or technological topics, a Technical Expert (e.g., Chartered Engineer, Chartered Scientist, etc.) in the relevant field must be involved to assess the specific aspect of the claim that triggered the Level 2 assessment (e.g., complex technical uncertainties) to determine if it meets the required Assessment Criteria.

● Tax/Compliance Review: For financial or compliance-related issues, a Financial/Tax Expert (e.g., a Chartered Tax Advisor) or Compliance/Audit Expert must evaluate the specific aspect of the claim that triggered the Level 2 assessment (e.g., adherence to tax regulations or eligibility criteria) to ensure it complies with the relevant tax legislation.

This decision-making structure ensures that non-critical failures are handled consistently, with a clear pathway for escalation or rejection.