November 2025

Prototype Development? We Call It R&D

If you’re building prototypes, testing ideas, or trying to make something work that hasn’t been done before then:

You’re probably doing R&D (even if you just call it “development”).

A lot of UK businesses think R&D is only for labs and tech giants, but HMRC’s definition is much broader. If you’re:

• Solving a technical problem
• Figuring out something that isn’t obvious
• Testing, iterating, or experimenting
• Developing a new or improved product, process, or technology

That could be R&D.

Why it matters

Prototype development often is R&D because it involves uncertainty, you don’t know the answer upfront, so you test your way there. And that means you could qualify for R&D tax relief, gaining cash back for:

• Staff time
• Prototype materials
• Testing and iterations
• Software and subcontractors

Even if the prototype fails, it still counts.

If you’re pushing technical boundaries or building something new, don’t undersell it.
Your “just trying this out” might be exactly what HMRC calls R&D.

For your free consultation email Tony: tbackhouse@rfm-more.co.uk