Which positions or staff roles within a company can be incorporated into an R&D tax credit claim?

Staff from different areas of your business may be involved in R&D activity taking place. It is essential that staff who are involved in the project have their activity evaluated during the project, not just focusing on job titles.

Employees who are not part of an R&D team can also contribute to qualifying direct or indirect R&D activities. If their work supports the resolution of a scientific or technological uncertainty, their time may be relevant to the R&D claim.

When identifying staff costs that are eligible for R&D tax credit relief, ensure that the work undertaken is relevant to your trade and part of a specific project that is seeking advancements in a scientific or technological field.

A qualifying project should involve resolving scientific or technological uncertainties and aim to achieve an advance beyond existing knowledge or capability in the relevant field.

After the qualifying R&D project has been identified, assess the project’s boundaries and identify the expenses that can be included in your claim. Often, the most substantial R&D cost is the staffing expenses of individuals involved in the R&D. This can include employees directly carrying out qualifying work, as well as those providing qualifying indirect support to the project.

Businesses must be able to identify the individuals that engaged in the projects and which specific activities they carried out. They must also include the proportion of their total time dedicated to those particular R&D activities. This will clearly outline that any staff costs included within the claim are reasonable, accurate and appropriately supported.

This is why we recommend you keep your entire R&D project well documented, including timesheets where available. The more detail included within a claim, the easier it is to support the expenditure and activity being claimed.

Maintaining accurate records will demonstrate the staff time apportionment across qualifying and non-qualifying activities. It can also support the methodology used when calculating an R&D tax relief claim.

With that said, HMRC recognises that some businesses may not have maintained detailed contemporaneous records. If contemporaneous records are missing from the rest of the R&D claim documentation, reasonable apportionments may still be accepted, provided they are based on credible evidence and can be clearly explained.