How to document R&D activities as you go: a calendar for the financial year

Every tax authority that runs an R&D incentive says the same thing in its own words: keep records at the time, not afterwards. In the United States the IRS asks for evidence of the process of experimentation; HMRC in the United Kingdom expects a competent professional to be able to explain the uncertainty; AusIndustry wants to see hypothesis, experiment and evaluation; the CRA in Canada asks how the work was done, not just what was achieved.

The good news is that the records that satisfy one of them satisfy all of them. The bad news is that nobody keeps them by accident. This guide is a routine, organised around the year, that produces the evidence as a by-product of doing the work.

Before the work starts: the project note

When a project is approved, someone technical writes half a page answering four questions:

• What are we trying to build or improve, and for whom?
• What do we not know how to do, and why is that not already answered by what is publicly available?
• What approaches might we try?
• Who will work on it?

That note is dated and saved where it cannot be quietly edited later. It is the single most valuable document in a claim file, because it proves that the uncertainty existed at the outset rather than being discovered when the claim was being written.

During the work: capture, don't create

Engineers, developers and scientists already produce evidence. The task is to make sure it survives and can be found:

• Version control and issue trackers. Commit messages, pull requests and tickets that describe what was tried and why it failed are experimentation records. Ask for one extra sentence of "why" in each.
• Test results. Failed tests are more valuable than passing ones. Keep the failures.
• Design reviews and meeting notes. A dated note that records "we considered A and B and chose B because A could not achieve X" is a process of experimentation in one line.
• Time. Whether by timesheet, sprint allocation or a monthly estimate signed by the team lead, record who spent time on which project. Do it monthly at the latest; quarterly estimates are already reconstructions.

At milestones: the checkpoint

At each release, prototype or phase gate, the technical lead spends fifteen minutes updating the project note: what was resolved, what remains uncertain, what changed in the approach. Three or four such entries across a year form a narrative that no one has to write from memory.

At year end: assemble, don't invent

With the routine in place, year end is administrative. For each candidate project the file contains the opening note, checkpoint updates, links to the technical evidence, and the time record. The finance team adds cost data. The narrative for the claim is drafted from the notes, reviewed by the person who did the work, and dated.

What "contemporaneous" does not mean

It does not mean perfect. Authorities accept that records are kept by busy people. It means the records were made at or near the time and were not created to support the claim. A dated engineering wiki page with typos beats a polished document written the week before filing.

Who owns it

Documentation fails when it belongs to everyone. Name one person per project who is responsible for the note and the checkpoints, and one person in finance who is responsible for time and cost. Put both in the project kickoff.

Jurisdiction notes

• United States. Business component reporting on Form 6765 asks for information by project, so organising records by business component from the start saves rework.
• United Kingdom. The Additional Information Form requires project descriptions covering the advance sought, the uncertainties and how they were overcome, which map directly onto the project note above.
• Australia. Registration asks for hypothesis, experiment, observation and conclusion per core activity; the checkpoint entries provide them.
• Canada. Form T661 asks what uncertainties you faced, what work you did to overcome them and what advancement you achieved.

Educational material, not advice. Confirm the current requirements with the relevant authority or a qualified adviser.