R&D relief: importance of payment

Most of the categories of eligible expenditure require that the expenditure is not only incurred but also paid before being eligible for inclusion in a claim for research and development (R&D) tax relief. The First-tier Tribunal recently had to consider the question of whether an anticipatory R&D claim could be made before payment had actually been made. The decision in the appeal was (in my opinion) entirely predictable, but it seems HMRC’s guidance may actually be too generous. Revenue expenditure included in intangible fixed assets can be treated as deductible in the year incurred.