Some types of staff expenses can be included in your R&D tax credit claim. In order to determine whether the expense can be claimed for, we apply the following criteria:
- It’s a staff cost
- It’s a reimbursed expense.
- It’s related to the R&D
Staff Cost
This criterion requires that the cost is related to the employment of the staff member and not only claimed by a staff member. For example, if a staff member buys some materials for a prototype, that would not count as a business expense and would instead be classified as a consumable in your R&D claim.
Reimbursed Expense
The cost must first be taken by the staff member to count as a qualifying staff cost for your R&D tax credit claim. If the expense was paid initially by the business then it would not count. This is important because something like travel to a feasibility study meeting is not claimable elsewhere in the R&D claims process unless it’s first been paid by the employee.
Related to the R&D
The expense needs to relate to the cost of delivering qualifying R&D activities. For example, your employee pays train fares to attend two different meetings:
- A meeting to plan a new research project
- A board meeting
Only the travel to the first meeting would qualify, as the second meeting will inevitably include discussions related to other aspects of the business beyond their R&D activities.
Example Expenses
We therefore typically claim for the travel and subsistence expenses that relate to the R&D. So if one of your staff engineers travels abroad to attend a meeting to discuss the research timeline for a new product’s development, then the travel and basic accommodation and food expenses can be included. HMRC has additional examples in its R&D Manual which can provide more clarification if needed.
For the full breakdown of the R&D costs that can be included in the R&D claim then it’s worth consulting our guide to qualifying R&D costs.
