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Where Taxpayers and Advisers Meet

Research & Development expenditure tax relief

Tom Gregz
Posts: 2
Joined: Mon Jul 09, 2018 9:33 am

Research & Development expenditure tax relief

Postby Tom Gregz » Mon Jul 09, 2018 9:50 am

Hi,

We have a client whose Ltd company work involves all pure scientific research, therefore they are entitled to a company tax relief deduction for Research and Development expenditure.
They pay rent for the use of a laboratory and office. Is this rent claimable as R&D expenses, under any circumstances? For example, perhaps if it includes the usage of consumable items such as water and electricity within the laboratory.

SteLacca
Posts: 402
Joined: Fri Aug 07, 2015 2:17 pm

Re: Research & Development expenditure tax relief

Postby SteLacca » Mon Jul 09, 2018 10:57 am

Only costs that are directly attributable to the R&D are allowable for the R&D credit/enhanced deduction. This excludes items such as fuel (unless used directly in the project), parts etc.

With regards to rent, unless the sole purpose of the rental building is for R&D it's unlikely that HMRC would agree it's allowable. However, if no previous claim has been made, why not simply apply for advance assurance so the you will have certainty regarding the claim?

Tom Gregz
Posts: 2
Joined: Mon Jul 09, 2018 9:33 am

Re: Research & Development expenditure tax relief

Postby Tom Gregz » Tue Jul 10, 2018 9:55 am

Thanks for your assistance,

The rent is for a laboratory which is used by the client purely for research, therefore perhaps it would be allowable.


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