Types Of Expenses That Qualify For Research And Development Tax Reimbursement
Majority of businesses are eligible to make claims for research and development costs. This is regardless of the size of the business and its profitability status. It is advisable to engage your technical team on matters pertaining to development as opposed to the finance department.
An area where a business can lodge research and development tax relief claim is staffing costs. You will find employer NI contributions, employer pension contributions, certain reimbursed expenses and gross salaries under this ambit. Some of the benefits that will be found under the gross salaries are overtime pay, cash bonuses and wages.
Subcontracted R&D is another type of costs that qualify for research and development tax relief claims. However, it is important to note that the RDEC scheme expenses do not qualify for the reimbursement. You are permitted to include the costs of subcontractors that took part in your R&D projects if you are SMEs.
Externally provided workers costs are eligible for tax relief claims for research and development project for your company. The EPWs include the agency staff, freelancers and contractors. As the claiming company you must supervise and direct the externally provided workers. In the event that the EPW is engaged in R&D and non-R&D activities, there must be appropriate apportionment.
You can place claims for research and development tax relief for consumables. These are considered as the materials that are consumed or transformed in the course of your R&D procedures. You will come across materials such as water, fuel and power included in this category. Costs that are incurred after you are through the technological and scientific resolution will not form part of your claim.
Any expenses for your computer software can be included in the research and development tax relief claims. You are allowed to include software that was partly used in the R&D projects on the condition that there is reasonable application of apportionment.
Clinical trials volunteers in the pharmaceutical field can have their costs included in the research and development tax credit claims. It is only in the pharmaceutical field that you will find this category of expense. The costs are incurred because of the payments made to volunteers that are participating in clinical trials. The trials are meant to test the drug efficiency and they are part of the R&D project.
The process of navigating the research and development tax relief claims is not easy. You will need professional guidance in this case and it is a smart move to hire the services of a qualified service provider. In order to obtain the optimum value for your claim, you need to hire the services of chartered tax advisers and technology experts.