How is a claim made and what costs qualify for R&D?

How a claim is made?

After first glance, making an R&D claim may seem like a tedious process that requires hours of trawling through invoices to try and ascertain a cost attached to a company’s R&D project(s). Although gathering information is a necessary step in creating a good solid claim, it does not have to be pain staking at all.

We keep the process simple and make sure the work on your end is at a minimum. The processes is started by having a look at what projects have been undertaken in the last 2 financials years to see which ones qualify for the scheme. All you have to do is regurgitate information and we will make sure the written report is comprehensive and accurate. Following on from our initial chat, we’ll get in touch with your accountant and try and gather as much financial information from them as possible. Once we have some figures, we’ll just need a 10-minute chat to put some percentages against the costs and we can do the rest.

What costs qualify?

A number of different costs qualify for the scheme, and when totalled together can actually add up to some significant numbers. Once totalled, the amount of credit received can be anywhere between 26-33% of this figure dependant on the company’s tax position. The different costs which qualify are as follows:  

  • Staff – A percentage of staff time can be included.
  • EPW – This stands for Externally Provided Workers. This is essentially an individual (not a company) who comes under the direct control of the business claiming R&D.
  • Subcontractors – If the business has spent money outsourcing work this can be claimed under R&D.
  • Consumed and transformed – This covers a wide range of costs such as wasted materials, prototypes, and electricity.  
  • Software – Any software that’s been used may be included such as CAD or FEA. This is usually smaller cost but still worth some consideration.