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Should I Include Reimbursed Expenses in my R&D Tax Credit Claim?

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The process of identifying qualifying expenditures for an R&D tax credit claim can be intricate and time-consuming. In this article, discover what reimbursed expenses are, whether they can be included in your R&D claim and how Ayming’s team of experts can help. 

What are reimbursed expenses?

The HMRC clearly explains the meaning of reimbursed expenses: “Expenditure is reimbursed if the cost is initially borne by the employee”. If the expenses were paid for directly by the business and not by the employee, they will not count as reimbursed expenses.

Can reimbursed expenses be included in an R&D claim?

A business can include reimbursed expenses in their R&D tax credit claim, as long as they are classed as staffing costs. However, just because an employee incurred an expense does not automatically make it a staffing cost.

To include reimbursed expenses within an R&D claim, the cost must be:

  • Related to travel and subsistence
  • Incurred by the employee, not paid for directly by the company or using a company credit card
  • Necessary for fulfilling the requirements of the employee’s job
  • Directly related to the R&D activities

When an employee incurs an expense that qualifies as a staffing cost and meets the above criteria, a company can reimburse them for it and include them in their R&D claim.  

While the guidance clarifies that certain reimbursed expenses incurred during employment are eligible, it excludes other expenses like travel to work and reimbursed training costs. Read our related article to find out more about what qualifies as staffing costs in an R&D tax credit claim: Can You Count Apprenticeship Costs as R&D Expenses?

Is it worth including reimbursed costs in your R&D claim?

It is important to review all of your reimbursed expenses to see if they are eligible for the R&D scheme. If your business has a sizeable amount of qualifying reimbursed expenses, like travel and subsistence expenses linked to R&D activities, not including them could significantly reduce the value of your overall R&D claim.   

Maximise the value of your R&D tax credit claim

At Ayming, we are dedicated to ensuring that your R&D tax credit claim experience is as seamless and stress-free as possible. Our team of consultants features technical and legal experts, as well as ex-HMRC personnel, whose knowledge and experience are second to none. From start to finish, we will provide you with comprehensive support throughout the entire R&D claim process. 

With our expert guidance, you can be confident that you are making the most of all available opportunities. Reach out to Ayming and take the first step towards unlocking the true value of your R&D investment.