We often hear from companies that they don’t believe they are eligible to claim R&D tax relief as, for the majority of their work, they are acting as subcontractors for other companies.
In some cases this might be a correct assumption, however, it’s not always the case. It can be quite common for a company undertaking an R&D project to subcontract part or all of the development.
In these cases, we must try to decide whether it is the subcontracting company, the subcontracted company or both which make the R&D claim.
Whilst there are no specific rules with regards to subcontracted relationships, in order to establish which party should make the claim for R&D tax relief, HMRC will typically consider the following:
In some cases, it may be that both the subcontracting company and the subcontractor can submit an R&D claim for their own individual costs spent on the same project.
If you have any questions on this blog or anything R&D related, please contact us at firstname.lastname@example.org.
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