HMRC change of policy for R & D tax relief – Reimbursed expenses

HMRC recently revised its guidance on staff costs qualifying for Research and Development (R & D) tax relief relating to reimbursed expenses.  Qualifying staff costs for R & D claims have always included employee salaries, employer pension contribution and employer NICs in respect of personnel undertaking R & D project work. The inclusion of travel and subsistence was initially denied, but more recently became uncertain as a result of HMRC guidance issued on 8 October 2014.  HMRC has now amended its position following its change in the interpretation of the law and confirmed that retrospective claims can be made where claimants relied on the incorrect old guidance.  In other words, relevant travel and subsistence costs can now be built into R & D claims and an element of retrospection is being allowed.

The window for making amended claims for prior years, outside the normal time limit of two years after the accounting period end, closes on 31 January 2018.  The retrospective claim can be made for accounting periods ending between 9 October 2012 and 31 January 2016, where the original claim was made on or after 9 October 2014.

If you believe your company has under claimed R & D tax credits in prior years, or are interested in exploring R & D tax credits more generally, please get in touch with Brian Jukes on 02476 221 046 or e-mail [email protected].