Corporation Tax Act 2009 section 104P

Total expenditure on workers

Section 104P defines how a company calculates its total expenditure on workers for the purposes of the R&D tax relief regime.

• Total expenditure on workers for an accounting period is the sum of two components: relevant staffing costs for directors and employees, plus a portion of costs for externally provided workers.
• The first component covers the relevant portion of the company's own staffing costs paid to or in respect of directors or employees who are actively engaged in relevant research and development.
• The second component is the appropriate percentage of a relevant group company's staffing costs incurred in providing externally provided workers, but only the portion that relates to PAYE and NIC liabilities.
• The PAYE and NIC portion for externally provided workers is calculated using the formula R × 100 / T, where R is the qualifying expenditure on those workers and T is the total qualifying expenditure.