What staff costs qualify for relief? Who are externally provided workers? Can you claim sub-contractor costs? Do reimbursed employee costs qualify?

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Can you clarify the circumstances under which a subcontractor and the company can elect to be connected?

My client is profitable and claiming enhanced R&D tax relief.

He has a number of contractors that are based in Eqypt and raise invoices....

Can you clarify the circumstances under which a subcontractor and the company can elect to be connected?

My client is profitable and claiming enhanced R&D tax relief.

He has a number of contractors that are based in Eqypt and raise invoices. They are the Egyptian equivalent of sole traders invoicing for personal services.

Their work is almost entirely related to R&D projects.

I am trying to identify the circumstances that would allow them to be treated as connected parties so I can claim 100% rather than 65% of their time allocated to R&D projects.

I understand that we can elect contractors to be deemed as connected and therefore claim 100% of the cost instead of 65% however - I can't find a clear definition of the circumstances allowed.

Previous R&D tax advisers have advised another client on how to do this using a CTA 2009 s 1135-1136 election, however, we don't use this tax adviser any more so I can't ask them!

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If you post this query onto the Virtual Tax Partner service at http://www.VtaxP.co.uk an R&D specialist will be able to answer this one for you.

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