Companies who followed HMRC’s guidance on staff costs may have claimed less R&D tax relief than they were entitled to.
In the past few years, HMRC has issued some conflicting guidance on what you can include as an eligible staff cost in your R&D claim. In October 2014, HMRC issued a note which narrowed the definition of an eligible staff cost to exclude most reimbursed employee expenses. This restriction was lifted in a note issued in October 2016.
Companies have two years from financial year end to lodge their R&D tax claim. This two year window has now expired for periods ended before September 2015. However, HMRC has issued a procedure allowing companies who relied on their guidance to amend their R&D claims lodged between 9 October 2014 and 31 January 2016. This gives companies a unique opportunity to go back and make sure they claim all eligible staff costs. The revised claim must be submitted by 31 January 2018.
If you would like to know more about amending your claim or maximising your staff costs, please contact a Swanson Reed R&D Tax Advisor today for an assessment. We look forward to speaking with you.