Research and development (R&D) tax relief allows small and medium-sized companies to claim a tax deduction for 230% of their qualifying R&D costs, but they must show how the total of relevant costs was arrived at. This total of costs claimed can include the salaries of employees and directors directly engaged in R&D projects, along with business expenses reimbursed to those individuals.

The official HMRC guidance had indicated that reimbursed employee expenses could not be included in the R&D claim, but this advice has been changed several times in the last four years, creating confusion.

If your company made an R&D claim on or after 9 October 2014 you can now amend that claim if you didn’t include reimbursed expenses in the total R&D costs claimed. The period of the claim must end between 9 October 2012 and 31 January 2016. Such amendments would normally have to be submitted within two years of the end of the period, but these amended claims can be submitted to HMRC up until 31 January 2018.

We can help you with your initial or amended R&D tax relief claim.