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HMRC internal manual

Corporate Intangibles Research and Development Manual

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HM Revenue & Customs
Updated
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R&D tax relief: categories of qualifying expenditure: externally provider worker - connected staff supplier

CTA09/S1129

Where the connected staff provider or staff controller includes:

  • all the payment that it receives for provision of staff, and
  • all of its relevant expenditure in paying the externally provided workers (these expenses should be identified by reference to the criteria used to identify staffing costs as in CIRD83000),

Under the second bullet point, the relevant expenditure may include reimbursed expenses, paid by the staff provider or staff controller to staff. Further guidance on what qualifies as reimbursed expenses is found at CIRD83200.

in its accounts for a period ending not more than 12 months after the end of the accounting period in which the company claiming the R&D allowance makes the payment, and does so in accordance with GAAP, then the company may claim R&D tax credit on the lower of:

  • the qualifying payment for staff that it makes to the staff provider, and
  • the amount that the staff provider or staff controller includes as relevant expenditure in its accounting periods ending not more than 12 months after the end of the company’s accounting period in which the payment was made.