Share this content

R&D employment costs

R&D employment costs

A small high-tech husband and wife company started working on R&D projects, in addition to various other work. So far they received wages under NIC limit plus dividends. The R&D guidance states that wages paid to employees doing both R&D and non-R&D work should be apportioned. Can the company to pay market rates for R&D work and claim it as a R&D expense in full, but low rates or nothing for non-R&D work?

Many thanks for your views...


Please login or register to join the discussion.

02nd May 2012 08:41

Reasonable apportionment

I think you would be expected to make a reasonable apportionment.  If the total remuneration is £10,000 and half the employee's time is spent on R&D, then £5,000 is a reasonable apportionment.  Your proposal sounds unreasonable to me and I would fully expect HMRC to challenge it.

Thanks (0)
02nd May 2012 09:14


If the individuals need to be classified as workers (rather than as officers) in order to secure R&D relief, then presumably NMW would need to be applied to their other duties? But we don't know enough about those other duties etc. Arguable that they are performing those other duties as officers? Just a thought.

Thanks (0)
By merlyn
19th Jul 2012 07:24

If the two directors take a salary of 10k each and dividend payments of 50k each per year and they estimate that around half their time is spent on R&D work, then each of them would have 5k of R&D expenditure, making their total claim 10k.


Thanks (0)