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What are qualifying indirect activities for R&D?

What are qualifying indirect activities for R&D?

Research and Development (R&D) expenses refer to the costs incurred by a company in developing new products, services, or processes. These expenses are critical to the long-term survival of organizations, as they allow them to adapt to changing market conditions and maintain their competitive advantage. In this article, we will discuss what are qualifying indirect activities for R&D.

What are qualifying indirect activities?

Qualifying indirect activities are the activities that support the direct R&D activities. These activities are not directly related to the R&D process but are necessary to support the R&D activities. The following are examples of qualifying indirect activities:

Maintenance: Maintenance activities are necessary to keep the R&D equipment and facilities in good working condition. These activities include cleaning, repairs, and upgrades.

Security: Security activities are necessary to protect the R&D equipment, facilities, and intellectual property. These activities include access control, surveillance, and cybersecurity.

Administration and clerical activities: Administration and clerical activities are necessary to support the R&D process. These activities include record-keeping, data entry, and scheduling.

Finance and personnel activities: Finance and personnel activities are necessary to manage the financial and human resources of the R&D process. These activities include budgeting, payroll, and benefits administration.

Qualifying indirect activities for R&D tax credits

Qualifying indirect activities are eligible for tax credits under the R&D tax credit program. These activities are considered part of the R&D process and are necessary to support the direct R&D activities. By claiming these tax credits, companies can reduce their taxable income and increase their cash flow.

Conclusion

In conclusion, qualifying indirect activities are the activities that support the direct R&D activities. These activities are not directly related to the R&D process but are necessary to support the R&D activities.

Examples of qualifying indirect activities include maintenance, security, administration and clerical activities, and finance and personnel activities. Qualifying indirect activities are eligible for tax credits under the R&D tax credit program.

By claiming these tax credits, companies can reduce their taxable income and increase their cash flow. It is important to consult with a tax professional to determine the specific tax treatment of qualifying indirect activities in your country.

R&D Tax Credit Specialists – Claim HMRC Tax Breaks, Rebates & Refunds

UK R&D Tax Credit Specialists

Claiming R&D tax credits isn’t just a paperwork drill – it’s a pathway to reducing taxable income and enhancing your cash flow. Our specialists guide you through the complete process of claiming R&D tax credits on your business expenses.

We ensure your claim complies with all HMRC guidelines to maximise your returns and provide the financial boost your company deserves.

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