Biotech, medtech and diagnostics: much of the work qualifies. The cost rules need care.

Work to resolve scientific or technological uncertainty in developing a drug, device, diagnostic or process, such as discovery and preclinical research, formulation, assay development and the engineering of a device. The test is the same as in any sector: an advance in the field, and uncertainty a competent professional could not readily resolve. Routine manufacturing and quality control are not R&D.

Many can. Payments to trial volunteers are a listed qualifying cost, and staff time, consumables and contracted-out work on the trial can qualify if the trial is part of R&D. We look at what the trial was trying to establish. Costs of running a trial purely to meet a regulator's requirement, without resolving any technical uncertainty, need careful review.

Sometimes. For periods beginning on or after 1 April 2024, contracted-out R&D done abroad only qualifies if it is necessary because of conditions not present in the UK, and wholly unreasonable to replicate here. HMRC's examples include disease incidence and trial populations. Cost and availability of workers are disregarded. We assess each trial site against that test.

Yes. Payments to clinical trial volunteers are named in HMRC's guidance as a qualifying cost. They sit alongside staff costs, consumables, software and data costs. As with every cost, they must have been paid before the claim is made, and they must relate to R&D. We keep the payment records with the trial documentation.

They can, as contracted-out R&D, where you decided the R&D needed doing and can evidence that decision and your planning. For an unconnected contractor, 65% of the payment is the qualifying amount. A contract research organisation's overseas work must meet the overseas exception for periods beginning on or after 1 April 2024. We check the contract terms and the location of the work.

For periods beginning on or after 1 April 2024, HMRC says there is no restriction on claiming subsidised costs under the merged scheme or ERIS. Earlier periods had grant-related rules, which still matter for older claims and enquiries. We always check the grant terms, because what a grant covers can affect how costs are treated.

Yes, where the development involves technological uncertainty about whether or how a device can achieve its function. That might be materials, mechanics, electronics, software or the interaction between them. Work to adapt an existing device for a new customer is routine. As with engineering, we separate the uncertain design from the standard build.

Preparing a submission is generally administration. The scientific or technical work that generates the evidence in it, where the outcome was uncertain, may qualify as R&D. We look at which activities resolved uncertainty and claim for those. Time on drafting, filing and correspondence with regulators is not usually part of the claim.

Items used up in R&D, such as materials, chemicals, fuel, power and water, are consumables and can qualify. Reagents and samples consumed in qualifying experiments fit that description. Equipment you keep is capital expenditure and is excluded, though a separate capital allowance may be available. We tie consumables to the project that used them.

Yes, where the project sets out to resolve scientific uncertainty, for example whether an assay can detect something reliably at a given sensitivity. Software and data analysis work in a diagnostic can qualify on the same basis. Validation to meet standards using established methods is usually routine. We look at what was unknown at the start.

ERIS is for loss-making SMEs whose relevant R&D expenditure is at least 30% of total relevant expenditure. It gives an extra 86% deduction, making 186% in total, and a payable credit of 14.5% of the surrenderable loss, so a company with no profits can receive cash, subject to the PAYE cap. The maximum is about £26.97 per £100 of qualifying cost. Use our ERIS intensity checker.

Yes, if the spin-out is a trading company chargeable to UK Corporation Tax and carries out qualifying R&D. Points to check include who carried out and decided the R&D, the treatment of any work done by the university as contracted-out R&D, and whether connected companies affect the intensity test. We review the licence and research agreements.

If the studies are part of qualifying R&D, the costs can qualify in the usual categories. Most are carried out by a contractor, so the contracted-out rules apply: the company must have decided the R&D needed doing, 65% of an unconnected payment counts, and overseas work must meet the exception for periods beginning on or after 1 April 2024.

It can be, where the analysis itself involves uncertainty, such as developing a method to extract a signal that standard statistics could not. Running a pre-specified analysis plan with established tools is routine. Data licences and cloud computing costs can qualify where used for R&D, for periods beginning on or after 1 April 2023. Keep the analysis plans and the record of any method development.

No. HMRC's list of costs that cannot be claimed includes patents and trademarks. The cost of filing and maintaining them is not R&D expenditure. A separate relief, the Patent Box, can apply a 10% Corporation Tax rate to profits from qualifying patents, and that relief builds on the same R&D. Our Patent Box page covers it.