Costs that qualify for Research & Development Relief

Small and medium-sized companies can claim R&D tax credits of 230% of qualifying expenditure incurred on or after 1 April 2015. This article lists a summary of costs that can be considered for this relief, broadly, if they contribute directly to seeking an advance in science or technology. They are:

  • Employee costs – staff who are directly engaged in carrying out R&D.
  • Staff providers – paying a staff provider (agency) for staff directly engaged in R&D activities.
  • Materials – consumable or transformable materials used in carrying out R&D.
  • Payments to clinical trials volunteers.
  • Cost of utilities, power, water and fuels
  • Computer software, and
  • Subcontracted R&D expenditures

Planning note:

The claims process is a fairly complex and drawn out process that involves qualifying the business, the R&D project and the relevant costs. This is done as part of the companies corporation tax return, and in certain circumstances, advance clearance can be obtained prior to making a formal claim.

Firms who believe they may have a qualifying project should seek advice, and of course we can help.

Posted in Tax credits

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