Are Travel and Tourism Travel Costs Eligible For R&D Tax Relief?

Travel and tourism businesses are often unsure whether their travel costs are eligible for R&D tax relief. This is because the rules around what qualifies are very complicated.

HMRC guidance states that “Cash reimbursements of expenses or other reimbursements with salary are staffing costs”. This can make it difficult to know what is and is not eligible.


Subsistence refers to the basics of survival – food, water, shelter. More philosophically, it can also indicate a state of existence or the act of living.

HMRC’s guidance confirms that reimbursed expenses can be included as part of a staff cost, providing they relate to R&D activity and the expense was initially borne by an employee. For example, John is the R&D director of a manufacturing group and flies to China on a quarterly basis for product development trials. He spends PS1,000 on flights each time, which he then has reimbursed by the company. These costs are classed as an allowable staff cost and can be claimed for by the business when claiming R&D tax credits.

However, if the flights were booked by the company via an online booking platform and paid for with the company credit card, then these are not classed as allowable staff costs. This is because they were not originally incurred by an employee.


HMRC’s explanation of staff costs leaves a bit of room for ambiguity, but it’s generally accepted that travel and subsistence expenses qualify as qualifying staff expenditure. This is good news for founders who often route these expenses through their company, especially in the early stages of a startup’s development.

To be considered a staff cost, an expense must have been paid by an employee and then reimbursed by the company. Expenses that have been paid by the company upfront aren’t eligible for R&D tax credits.

For example, let’s say Tom bought a sandwich for lunch while he was out of the office. His company may reimburse him, but because the sandwich was purchased “in order to fulfil the requirements of his employment”, it’s not an eligible staff cost for purposes of R&D tax credits.

On the other hand, if Tom booked himself flights to China in order to run new product development trials at a factory there, then these would be eligible travel expenses for R&D tax credits because they were originally paid by John and then reimbursed by his company.


HMRC guidance clarifies that reimbursed expenses which relate directly to qualifying R&D activities can be included as staff costs. This is a significant expansion of the R&D scheme and will allow businesses with sizeable numbers of eligible expenses to claim significant value in their claim. However, it is important to remember that the expenditure must first be paid by the staff member in order for it to qualify. For example, a staff engineer’s travel to a feasibility study meeting organised by the company would not count as eligible because it was not initially their responsibility.

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