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Can I include staffing costs in my client’s R&D tax claim?

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Author: Tom Mason

Staffing costs can be included in an R&D tax claim, provided they are directly related to qualifying R&D activities.

The UK Government recognises that employment costs often represent a significant portion of R&D expenditure.

As such, businesses are allowed to claim these costs as part of their R&D tax credits.

Eligible staffing costs for R&D tax credits

  • Salaries, bonuses, and payments – Any salary, bonus, or other payments made to employees, excluding benefits in kind (BIK), can be claimed as long as the payments are linked to R&D work.
  • Training costs – Training costs related to R&D projects are eligible. For instance, if employees need specific skills or knowledge to contribute to an R&D initiative, these training expenses can be included.
  • Class 1 National Insurance Contributions (NICs) – Employers can claim back the Class 1 NICs paid for employees working on R&D projects.
  • Pension contributions – Contributions to pension funds for employees working on qualifying R&D activities can also be included in the claim.

What if the staff member only spends some of their time on the project?

The rules become slightly more complex when employees spend only part of their time on R&D work.

In these cases, claims should reflect the proportion of time the employee dedicates to qualifying R&D activities.

For example, if an employee spends 60 per cent of their time working on R&D projects, then only 60 per cent of their salary and associated employment costs can be claimed.

This proportional approach applies to all activities, including indirect tasks that support R&D work.

Which staff members are eligible?

It’s not just the scientists and engineers doing the hands-on research that qualify.

A range of other staff involved in supporting roles are eligible too, as long as their work helps move the R&D process forward.

For instance, if a member of the HR team spends time recruiting a specific individual for an R&D project, the time they dedicate to this task is eligible for inclusion in the claim.

Similarly, administrative staff who assist R&D teams with project management, compliance, or other support tasks can also be considered for the claim.

Essentially, any staff member whose work indirectly or directly supports R&D activities, whether it’s organising, managing, or maintaining things that help with the project, can potentially be included.

R&D help for accountants

If you’re unsure which of your client’s staff qualify or need extra help from our R&D tax consultants, don’t hesitate to get in touch.