Identifying qualifying R&D may be the hardest part of completing a R&D Tax Credit claim, but there are a number of potential issues you need to consider when calculating qualifying expenditure. Here are just a few examples:
- Have you included managerial time for running, and administering the projects? These staff are often omitted from time recording systems, but they should not be forgotten.
- And an R&D share of general software such as Windows licences? You can claim the appropriate portion.
- Have you considered whether any offshore workers (especially in software) are sufficiently controlled to count as externally provided workers? An externally provided worker claim requires supervision rights, but these do not necessarily require personal contact.
- Are you loosely claiming for utilities other than heat, light and power?
- Are you claiming for renting computer facilities such as server capacity, because this is not a qualifying category of expenditure?
- Are any of the externally provided workers also your employees or directors, because these cannot be claimed as epws?
- Is the expenditure deductible in the tax computation for the period? This is a necessary condition for the claim to reliefs under the SME or RDEC R&D regimes.
Failing to understand and consider these issues (and others) can result in either an undervalued or inaccurate claim. So, as you are generally relying on your advisor to address them, you need to have full confidence in their capabilities.
An experienced and expert advisor such as MSC R&D will not leave any stone unturned or cut any corners when identifying the qualifying expenditure – our team of highly trained technical and financial experts drive the process, ask the right questions and deliver the optimum results for our
R&D Tax Credit clients.