Reimbursed expenses – do they qualify for R&D tax relief?

Lisa Baum, Tax Manager for MPA

Historically there has been confusion over whether reimbursed expenses could be included in R&D Tax Credit claims, with the main area of uncertainty being around travel and subsistence costs.

Recently HMRC clarified their interpretation of the law and introduced a special procedure to amend past claims which had been restricted to discount certain types of expenditure under previous HMRC guidance.

This could increase the value of your R&D claim if:

  • You’ve made a claim for R&D tax relief for a period ending between 9th October 2012 and 31st January 2016
  • You’ve claimed qualifying costs for staff time

If you reimbursed travelling and subsistence costs to your employees who were actively engaged in R&D activities, but didn’t include these costs in the value of your qualifying R&D expenditure, then we may be able to assist you in increasing the value of your claim.

How does this work?

For example, if during the claim period you spent £20,000 on reimbursed travel and subsistence costs which qualified for R&D tax relief, then this would equate to an extra £5,000 of benefit to your company.

We have until 31st January 2018 to amend R&D claims made between 9th October 2012 and 31st January 2016, so don’t miss out; call us now on 0808 208 5221 for your free assessment.

Lisa Baum, Senior Tax Specialist at The MPA Group