Is it possible to make a claim based on intangible assets?

If expenses eligible for R&D have been treated as an intangible asset, you can still claim them by deducting the cost of the intangible asset in your tax calculation. This deduction can be made either when the cost is recognised as an expense or over time through the asset’s amortisation, depending on how the expenditure has been recorded in the business’s accounts.

The R&D treatment will usually depend on the accounting policy applied to the asset and how the related expenditure has been recognised in the business’s financial statements. The tax computation must correctly reflect the accounting treatment, as this determines how and when tax relief can be applied.

It’s important to note that R&D tax relief can only be received for the asset once. If the cost is deducted as an expense in the tax calculation, any future amortisation relating to that expense will need to be added back in subsequent tax calculations. These adjustments continue until the full amortisation of the asset has been completed.

Careful documentation and clear treatment in the tax computation will help ensure the claim remains consistent with HMRC requirements and avoids duplication of relief.

If you are unsure how capitalised R&D costs should be treated in your tax calculation, seeking professional R&D tax credit guidance can help ensure the claim is prepared correctly and reflects the underlying accounting treatment.