Expenditure on software, consumable items and (for accounting periods beginning on or after 1 April 2023) data licences and cloud computing costs may qualify for each of the R&D tax reliefs under both the pre- and post-April 2024 schemes (see D1.401)1, and may be further amended by regulations2.
Qualifying R&D expenditure on software, data licences, cloud computing costs and consumable items
Expenditure on software, consumable items and (for accounting periods beginning on or after 1 April 2023) data licences and cloud computing costs is qualifying expenditure for the purposes of R&D relief.
More specifically, this means3:
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•ÌýÌýÌýÌý computer software
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•ÌýÌýÌýÌý consumable or transformable materials, which include water, fuel and power. There is no simple definition of consumed or transformed, but HMRC states that a key aspect is that the expenditure must be on items used by the R&D that are no longer useable in their original form4. HMRC provides as examples of consumable items chemicals used in the R&D process or
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Web page updated on 17 Mar 2025 17:37