R&D tax claims are potentially even more attractive following a relaxation of the rules by the tax office on employee expense claims.

David Kirk explains.

A company can claim enhanced deductions against its taxable profits for expenditure which is qualifying R&D (Research & Development) expenditure.

Reimbursed expenses

But back in October 2014, HM Revenue and Customs (HMRC) said that reimbursed expenses could not be included as part of qualifying staff costs for an R&D tax claim.

It has now reversed that decision.

HMRC is now allowing amendments to be made to previously submitted R&D tax claims to include reimbursed expenses for accounting periods ended after 9 October 2012, provided the original R&D tax claim was made after 9 October 2014.

Where an amendment is outside of the usual amendment window, the amendment must be made by 31 January 2018.

What are reimbursed expenses?

Reimbursed expenses include business expenses an employee has incurred personally which have been reimbursed by the company. It does not include those expenses paid on a company credit card.

The expenses must be incurred in actually carrying out duties of the employment and personal to that employee, such as travel and subsistence to a temporary workplace, but not the cost of training or purchasing an item on behalf of the business for example.

Making a claim

In some cases, the amount at stake may be quite small and not worth claiming, but there will be many cases where a sizeable retrospective claim could be made in order to achieve a worthwhile tax saving.

If you are interested in discussing this further, please contact your usual Bishop Fleming adviser, or a member of our Research & Development team.

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