The Beginner’s Guide to Taxes
Outlining The Costs That Are Eligible For Research And Development Tax Relief
A lot of business establishment qualify to claim research and development expenses. The eligibility is not dependent on the size or the profitability of the business entity. Your technical team is the best placed to have engagements regarding your development matters rather than 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. Among the benefits that you will find under the gross salaries include cash bonuses, overtime pay and wages.
Another type of expense that is eligible for research and development tax relief claim is the subcontracted R&D. You should however bear in mind that any expenses incurred under the RDEC scheme will not qualify for the tax relief. As an SME you are allowed to make claims on subcontractors’ expenditure that were involved in the R&D projects.
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. 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. Fuel, power and water are some of the items that fall under this category. 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. 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. The only place that this cost category is applicable is in the pharmaceutical sector. These are the payments made to the people who are taking part in clinical trials. The trials are part of the R&D projects whose objective is to test the efficacy of drugs.
It is a difficult task going through the process of qualifying costs in a research and development tax credit. You will need professional guidance in this case and it is a smart move to hire the services of a qualified service provider. 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.