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The Chartered Institute of Taxation has responded to the government consultation on the scope of qualifying expenditures for research and development (R&D) tax credits. The consultation looked in particular at whether expenditure on data and cloud computing should qualify for relief.
The institute said clarity was needed on whether expenditure incurred on buying a dataset qualified for R&D when that dataset was used to test something under development and which itself qualifies for R&D.
The institute disagrees with limiting or excluding indirect costs from eligibility for relief because they form a critical part of R&D. These costs, and the availability of R&D tax credits in respect of them, not only factor into the overall investment decision appraisals, but can add genuine value to the direct R&D work undertaken.
