Staff costs

Staff costs of directors and employees directly and actively engaged in relevant R&D can be included in the R&D claim.

Typically, the staff for our clients work on multiple tasks and projects and it is rare that 100% of staff time can be claimed for R&D.

In this case, our clients will calculate a proportion of time spent on qualifying R&D projects and take a % of salary costs and employer’s NIC.

In order to do this properly, a breakdown should be prepared of costs for individual staff members, so that they can be apportioned on a line by line basis. For example Mr A is apportioned 80% to R&D and Ms. B is apportioned 90%.

External workers

External workers can be claimed if PAYE is operated on workers provided by agencies/staff providers. However, if a consultant/contractor invoices via a limited company outside of IR35 and PAYE isn’t deducted, then the arrangement may be treated as a subcontractor restricted to 65%.


Key legislation: CTA09/Ss1123 & 1124 & 1128