Accountancy Today: R&D tax relief claims: Qualifying costs, dividends and expenses

Date: December 16, 2019

Some companies may consider changing their expense policy to have staff pay for relevant costs personally and then claim them back. However, for smaller amounts the extra costs of administration could outweigh the additional tax relief.

We always pay great attention to how people are paid when it comes to research and development (R&D) tax costs — as it is one area where companies can slip up with claims.

Many company owners often assume that the cost of their time can be used to reduce their tax burden in the same way as their salaried employees’ time and energy but it’s not necessarily so.

Here we will explore the rationale behind two company outgoings which, confusingly, are not included in qualifying costs when making R&D tax relief claims – dividends and expenses paid directly by the company.

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