13/05/2024
Changes to Overseas Research & Development Expenditure
For accounting periods beginning on or after 1 April 2024, HMRC will generally not permit expenditure incurred on overseas sub-contractors or externally provided workers (who are not under UK PAYE) to be included in R&D claims.
The above change is thought to be part of the governments attempt to focus on R&D relief being undertaken within the UK.
There are some exceptions to this rule and this mainly surrounds where the geographical/environmental conditions do not allow the R&D to effectively be undertaken in the UK. HMRC give the examples of deep ocean research or clinical trials and technology designed for extreme environments of instances where overseas R&D expenditure would be permitted for R&D relief.
In contrast, UK staffing constraints or costing issues which result in the R&D being undertaken overseas, would not be deemed to be an allowable reason to allow overseas expenditure to be included in R&D claim.
Should you have any questions concerning the above, please call 023 8046 1237 or email Joe Wilson
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