A new training programme for accountants and advisers
For technologically innovative companies, R&D tax relief is a key element of their financial planning. Accountants looking to support clients in sectors like IT, software, manufacturing, construction and engineering need to have a solid understanding of the relief and the administrative requirements around claiming.
The first question is to establish whether or not your client’s work qualifies as R&D for tax purposes. This means they need to be trying to achieve an advance in science or technology, relative to their whole industry, not just their own capability.
You then need to determine which costs relating to this work are eligible: staffing; consumables; subcontractors and externally provided workers (EPWs); software, data licences and cloud computing; and clinical trial volunteers.
Not all payments to subcontractors or EPWs are eligible – there are now restrictions on overseas expenditure. Where your client has contracted out part of the R&D work, they need to demonstrate they intended or contemplated the R&D themselves. If they were performing work under contract, they need to demonstrate the opposite – that they took the initiative to undertake R&D, rather than the customer.
The R&D schemes are one of the most complex areas of tax. The new R&D tax relief learning pathway, built by The R&D Community and supported by ACCA, gives ACCA members and others the essential knowledge required to advise clients on the fundamentals of R&D tax relief.
