Categories of eligible expenditure - Merged scheme

Categories of eligible expenditure - Merged scheme

The R&D qualifying expenditure for tax credits includes the costs of paying people to do the work, paying for the consumables used during the work, and paying for external resources where necessary. Most costs are common to both schemes, with some notable exceptions.
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Costs that do not fit in any of the cost categories cannot be included, no matter how vital that spending was for the success of the R&D project.


Staff

  • Staff costs includes salary, bonuses, employer’s NIC and pension costs

  • Out-of-pocket expenses can also be included, if they relate to R&D projects

Raw materials

  • Raw materials used up, consumed or destroyed during the R&D project can be included

  • Raw materials used to produce goods intended for sale, for example in a trial run of production machinery, cannot be included

Utilities

  • Heat and light costs can be included, but rent, broadband and other business expenses cannot

  • Software cost related to the R&D projects are eligible

Externally provided workers

Where workers are paid through a third party to provide services related to R&D, a proportion of these costs can be included

Subcontractors

Payments made to subcontractors to carry out activities related to R&D can be included in the claim.

Clinical trials

Payments made to clinical trial volunteers can be included in their own category. Other costs, such as payments made to subcontractors running the trials, or raw materials required for the trials can be included in the relevant categories.