What is the influence on an R&D tax credit claim when SMEs subcontract their work to other SMEs that share the same shareholders?

When an SME subcontracts R&D work to other SMEs with the same shareholders, the claimable costs are affected.

Usually, you can claim 65% of the subcontracted R&D costs. However, if both companies have the same shareholders (connected parties), the rules change.

For unconnected subcontractors, you can include 65% of the R&D-related costs in your claim. If only part of the services is R&D, only 65% of that part is claimable.

For connected companies, the amount you can claim is either the payment made or the subcontractor’s actual R&D costs, whichever is lower. It’s advisable to seek professional advice for accurate claims.