Qualifying expenditure is a closed list of categories, and a cost that does not fall into one of them cannot be claimed however central it was to the project. That is the first discipline of a claim: not asking what the work cost, but asking which of the company's costs fall into the categories the legislation names.
The categories
Staffing costs for people directly engaged in the R&D, apportioned by the time they actually spent on it. Software and consumable items used up in the project, including a proportion of power, fuel and water. Payments for externally provided workers supplied through a staff provider. Payments to subcontractors, subject to their own rules. Clinical trial volunteer payments in the relevant sectors. Data and cloud computing costs for periods since they were brought in. That is the list, and capital expenditure is outside it entirely.
What does not qualify, and surprises people
The cost of the asset the R&D produced. Rent and rates for the building the work happened in. Marketing the resulting product. Patent costs, which have their own relief. Recruitment fees for hiring the engineers. And, most commonly, the time of directors who supervised rather than performed the work, unless their direct contribution can be evidenced. Each of these is a real cost of the project and none of them is qualifying expenditure.
Subcontracted R&D
Subcontracted R&D is where the rules have moved most, and the question is which party can claim. Broadly, the company that decided to do the R&D and bore the risk is the claimant, rather than the one that carried out the work to order. A company doing development for a customer to the customer's specification is often not the claimant even though it did the technical work, and a company that outsourced the work but set the objectives often is. Establishing which side of that line a contract sits on is a reading of the contract rather than of the invoice.
Questions people ask about r&d qualifying expenditure
What costs qualify for R&D relief?
Staffing costs apportioned to the R&D, software, consumables including a share of power and fuel, externally provided workers, subcontractor payments, data and cloud costs, and clinical trial volunteer payments. Capital expenditure does not qualify.
Can I claim rent for the building the work happened in?
No. Rent, rates, marketing, recruitment fees and the cost of the asset the project produced are all outside the qualifying categories.
Who claims for subcontracted R&D?
Broadly the party that decided to do the R&D and bore the risk, rather than the one that performed the work to another's specification. It turns on the contract rather than on who held the tools.