R&D Tax Credits for Oil & Gas

R&D Tax Credits for Oil & Gas
The software underpinning RDRelief was sold to one of the big-4 professional service firms in 2018. Consequently, the brand is no longer in operation.
  • R&D Tax Advisors are invited to find out more about the Inspired.tax claim preparation software.
  • Otherwise, please feel free to continue to browse this website for useful information regarding claiming R&D Tax Credits in the UK. However, beware that none of the information has been updated since 2018.

Eligibility Criteria

Main article: Eligibility Criteria
For an Oil and Gas project to qualify as R&D for Tax purposes, it needs to adhere to the governments BEIS guidelines.
These guidelines apply to all fields of Science and Technology (not just Oil and Gas) and state:

Technological Advance in Oil & Gas

The Scientific or Technological Advance must be relative to the current Technological baseline within the oil and gas industry. Hence an eligible R&D project needs to be more than just applying Technology for which there is already a publicly available reference. Likewise, an Advance can't be a commercial, business or functional Advance. It is often the case that there is a Technological Advance behind the more functional concerns - but it is the 'Technological' details of the Advance that needs to be brought out to support an R&D Tax Credits Claim.
Many types of Oil &D Gas services project can potentially be includable for R&D tax credits, including:
  • the development of new subsea infrastructure
  • Jacket designs for challenging locations
  • the development of drilling technologies to operate in more extreme wells with higher temperature and pressure requirements
  • the appreciable improvement of the performance of equipment
  • the development of new knowledge regarding geological interpretations and reservoir models through seismic processing
As with all fields of Technology, the key point around the Technological Advance is that you must be (seeking) to move Technology forwards against the industry baseline of knowledge and capability. Essentially this means that the project can't purely be coping, or reusing information from the public domain - but instead it needs to be making a step forward.

Technological Uncertainty in Oil & Gas

Essentially the Technological Uncertainty would be where an Oil and Gas technical competent professional in the is uncertain about how to achieve a specific Technological solution.
The Uncertainty may arise if you are unsure whether it is feasible to achieve the Advance. This Uncertainty may be because of the challenges faced when having to design components to minimise mechanical stresses or some other 'Technological' reason!
Alternatively, the Uncertainty may come about, as of how to achieve the Advance in practice. It may be that there are multiple options and it is unclear which would be the best taking into account various conflicting requirements.
Furthermore, you may encounter systems Uncertainty, for example, if it is unclear what the effect of integrating different well known and understood technologies but in a non-standard way.

Includable Activities

A project for R&D Tax Credit purposes begins with work to resolve Uncertainty and ends when the Uncertainty ends.
Typically, on Oil &D Gas projects, this can include activities such as technical work to support bids or tenders, proof of concepts, concept design, front-end engineering design and detailed design.
However, it can in some cases also continue into manufacture and offshore deployment.
You can also include time spent project managing the R&D activities - where it is overseeing the Technological aspects if the Project (and thus contributing to overcoming Technological Uncertainty).

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