There is now a limited window of opportunity to revisit and increase R&D tax relief claims for reimbursed travel and subsistence costs 
originally excluded.
Claiming for costs borne by employees that are subsequently reimbursed by an employer appears to have been causing some confusion amongst advisers and HMRC alike over recent years.
In seeking to clarify the position, guidance published by HMRC in a note to the Research and Development Consultative Committee on 8 October 2014 has been superseded with a revised interpretation of the law by HMRC. The initial note suggested that reimbursed expenditure for travel and subsistence could not be included in an R&D claim as it did not come within the definition of “staffing costs”. However, guidance issued on 27 October 2016 to better explain how to assess which types of reimbursed expenditure may be included in an R&D claim, contradicted the interpretation of law provided in the 8 October 2014 note.
HMRC acknowledges that some companies may have understated their claims for reimbursed expenses as a result of the note published on 8 October 2014. Accordingly, there is now an opportunity for such companies to amend their claims to include reimbursed travel and subsistence costs where:
a) Such costs were attributable to relevant research and development;
and
b) Are a cost that relates to an employee’s performance of the requirements of their job.
The deadline for making an amended claim for these expenses is 31 January 2018.
If you can answer yes to the following, then you may be able to make a retrospective claim to increase the amount of reimbursed expenses where qualifying travel and subsistence costs have been excluded:
- The company has already submitted a claim for an accounting period ended between 9 October 2012 and 31 January 2016;
- The original claim for that period was submitted to HMRC on or after 9 October 2014;
- Travel and subsistence expenditure reimbursed by the company was excluded from the claim.
