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Staff (direct and indirect)
Externally Provided Workers (EPWs)

Direct staff are those involved in core development work as described in the technical report.

Indirect staff are those involved in work to support the direct staff, and typically work in Finance, Admin, Maintenance, Personnel and Training.

Contributions to independent research (LCs only)

If Large Companies fund independent research by charities, education institutions or health service bodies, these payments can be eligible for relief.

These are workers that have been paid through an agency. In practice EPWs are:

  • Individuals (not companies);
  • Are not employees or directors of the company making the claim for R&D tax relief;
  • Are obligated through contract to provide services to the company making the claim for R&D tax relief.
  • Are paid by the staff provider, not the company making the claim for R&D tax relief.

Self-employed consultants cannot be EPWs, but may instead be treated as subcontractors if they are contracted to perform a specific task or activity within a company’s R&D project.

Subcontractors (SME only)

SMEs can often claim for subcontractors involved in their R&D projects.

However, this can be a complex area. Jumpstart Technical Analysts are trained to help our clients to work out which subcontractors they can claim as eligible and which they must exclude.

Companies can claim for items that are used up in the process of R&D, such as chemicals, materials, batteries and certain forms of tooling.

These costs can be significant for prototypes* and ‘first in class’ items, and it is important that clients do not claim too much.

Clinical trial volunteers

Construction of a prototype can be treated as ‘directly contributing’ to seeking an advance in science or technology, but only if it is created solely for use in the R&D.

It’s important that the prototypes are actually scrapped. If you end up selling them, they will not be considered part of the R&D project.

Payments made to people who volunteer to participate in clinical trials can be eligible.


Companies often buy software to allow them to conduct, project manage or report upon R&D projects.

This software can be claimed as eligible. Note that this is distinct from companies that are developing their own software in projects which may or may not contain eligibility.


Just because a company is subcontracting work doesn’t mean that it is necessarily subcontracting R&D or even the routine work required to support its R&D. It may not have any R&D at all!


Under the Large Company scheme, payments to subcontractors cannot be claimed except if the Large Company’s subcontractor is a university, college, charity, research organisation or health service body.


Under the SME scheme, 65% of the payments to subcontractors can be claimed except if the SME is connected to its subcontractor (e.g. is its parent, part of the same group, or are under common control). The rules are different for connected subcontractors.


There is no requirement that the subcontractor should be in the UK. However, it is important that the subcontractor must be engaged to perform a specific task rather than providing a service.


"We were totally stunned at the amount claimed"

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