Outlining The Costs That Are Eligible For Research And Development Tax Relief
A lot of business establishment qualify to claim research and development expenses. This is not withstanding how big or profitable the business is. 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. 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. RDEC scheme costs will however not be eligible for the tax relief. 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. Under this category you will find freelancers, contractors and agency staff. As the claiming company you must supervise and direct the externally provided workers. Proper apportionment must be applied if an EPW is carrying out both R&D and non-R&D operations.
Another area that you can lodge tax relief claims for research and development is consumables. These are considered as the materials that are consumed or transformed in the course of your R&D procedures. Fuel, power and water are some of the items that fall under this category. Among the expenses that will not be included for claims are the extra ones that result after you have finalized with the process of resolving the technological and scientific uncertainty.
Any expenses for your computer software can be included in the research and development tax relief claims. Programs that were partly utilized in the R&D projects can be eligible as long as reasonable apportionment is applied.
Other type of expenses that are eligible in the research and development tax relief claims are the ones incurred during clinical trials volunteers in the pharmaceutical industries. 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 undertaken as a part of the R&D projects with the aim of testing the efficiency of drugs.
The process of navigating the research and development tax relief claims is not easy. It is advisable to seek the professional input of competent service provider to provide the guidance that you require. If you are looking to maximize on your claims value, you have no option but to enlist the services of chartered tax advisers and a team that has the requisite technology skillsets.