What Reimbursed Expenses qualify for R&D Tax Relief?

If you are business with significant travel and subsistence costs relating to your R&D activities, it is worth contacting Innovation Tax to understand what Reimbursed Expenses qualify for R&D Tax Relief.

What Reimbursed Expenses qualify for R&D Tax Relief?

Did you know that HMRC recently relaxed the rules regarding the recovery of expenses incurred by staff in the course of undertaking compliant R&D activity?

Pre-existing legislation meant that staffing costs recognised as qualifying for R&D Tax Credits were limited to;

Salaries or wages (including bonuses)
Class 1 national insurance contributions
Pension fund contributions operated for the benefit of the directors / employees

However, whilst non-cash Benefits In Kind – such as car/fuel allowances, living accommodation remain non-compliant, certain reimbursed expenses may qualify.

What do HMRC mean by ‘reimbursed’ expenses?

To be considered ‘reimbursed’, the initial expenditure must have been borne by the employee and then repaid to them by the company.

It is a common mistake for businesses to undervalue their R&D tax relief claim by failing to include significant, allowable, reimbursed travel & subsistence expenses.

Which reimbursed costs qualify?

The cost must be an expense of employing staff, but one that allows the employee to fulfil the requirements of the role; expenses do not qualify simply as a result of having been reimbursed.

It must also have been incurred in actually carrying out the duties of the role; it’s not enough for the expense to be relevant to the job or to put the individual in a position to start work (or remain qualified to do so).

For these reasons, travel and subsistence costs whilst engaged in off-site compliant activity would generally qualify, whereas home-to-work travel and/or training costs would not.

Innovation Tax help clients maximise the value of their R&D Tax Relief claim.

As R&D scheme specialists we frequently enhance the value of a clients R&D Tax Relief claim by helping them to understand which reimbursed staff travel & subsistence expenses relating to their R&D activities are claimable. Ultimately, adding significant value by including costs they had previously overlooked or thought to be ineligible.

HOW CAN WE HELP?

It can be challenging to submit an R&D Tax Credit claim to HMRC’s exacting standards.
At Innovation Tax, our team of experienced sector specialists, technical and quality assurance experts and tax professionals will help you identify the full extent of your qualifying activities and expenditure and work with you to ensure the correct information is included in the claim documentation, giving you peace of mind that your claim is robust, maximised and defendable.

Start the conversation with a complimentary, no-obligation discussion.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

What Reimbursed Expenses qualify for R&D Tax Relief?