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 recommended to have discussions regarding your development issues with your technical staff instead of the finance team.
One area that firms are eligible to raise claims for research and development tax relief is staffing expenses. Some of the expenses that are included in this category are employer pension contributions, employer NI contributions, gross salaries and certain reimbursed business costs. Among the benefits that you will find under the gross salaries include cash bonuses, overtime pay and wages.
One area that you can make claims for research and development tax relief is the subcontracted R&D. However, it is important to note that the RDEC scheme expenses do not qualify for the reimbursement. As an SME you are allowed to make claims on subcontractors’ expenditure that were involved in the R&D projects.
Expenses incurred by the externally provided workers are included in the research and development tax relief claims. Contractors, agency staff and freelancers are some of examples of EPWs. You are supposed to direct and supervise the operations of the externally provided workers as the claiming firm. There is need to make to make the correct application of the right apportionment if an EPW is involved in R&D as well as non-R&D work.
Another area that you can lodge tax relief claims for research and development is consumables. These materials are regarded as the one used or transformed in your firm’s R&D process. In this category you will find power, fuel and water. Costs that are incurred after you are through the technological and scientific resolution will not form part of your claim.
The revenue expenditure for your computer software can form part of the tax relief claims for research and development. As long you make apportionment reasonably, you can include the software that was partly utilized in the R&D projects in your claims.
You are permitted to claim for costs involved in clinical trials volunteers in the pharmaceutical sector when applying for research and development tax relief. This expense category is only applicable in the pharmaceutical industry. The reason for these expenditures is due to the payments made to the people that have volunteered for clinical trials. The trials are undertaken as a part of the R&D projects with the aim of testing the efficiency of drugs.
It is a difficult task going through the process of qualifying costs in a research and development tax credit. It is highly recommended to enlist the services of a professional service provider to offer you the relevant guidance. Going for the services of experienced tax advisers and specialists in technology will ensure that you will get the value for your claim that you deserve.