There are many areas of expenditure that can relate to a qualifying R&D tax claim. It is vitally important to ensure all relevant expenditures are included, just as it is important to leave out all areas that cannot be used. These are as follows –
Staff costs. The people in your business are more often than not the largest expense. The time they spend on research and development projects will often be the largest part of an R&D tax relief claim. If you don’t have a specific R&D department in your business, then you will have to apportion costs accordingly. This can be done by looking at how much of your business is involved in research and development and dividing this by the overall staff cost.
Associated staffing costs. There is more to employing staff then paying their salary. You should also include employer’s National Insurance contributions and pension contributions. These are often missed with an R&D tax claim, so get these costs down and see your claim maximised.
Contractors. If your project needs outside expertise that you don’t already have in your business, then you might have to buy that in from the outside. Contractors that carry out specific work on your R&D project should be included as part of a claim.
Materials. If you are putting together a new product, then there will be materials involved with this. This is the materials for the prototypes, failed tests and samples used to get your product from idea to reality and ready for the market.
Getting all of the relevant costs together for a claim means you make the most of it and don’t lose out. Being efficient in business is often about doing the right things first time.