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 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. Wages, cash bonuses and overtime pay are found under the gross salaries.
Another type of expense that is eligible for research and development tax relief claim is the subcontracted R&D. 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.
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. 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. 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.
You are permitted to include your costs for computer software 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. The only place that this cost category is applicable is in the pharmaceutical sector. 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.
The procedure of navigating through the research and development tax credit claim is an intricate one. 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.