Ask an expert: Research and development allowances

Question:

My client is a pharmaceutical company undertaking research and development (R&D) into anti-malarial drugs. They have spent £100 000 on capital items mainly laboratory equipment which allows the R&D to be carried out. The company
accounts for this expenditure as R&D. Can they claim Research and Development Allowances (RDAs) because the equipment is used in a project seeking to resolve scientific or technological uncertainty? Or is there a danger that HMRC could argue that the activities are not qualifying for R&D because anti-malarial medicine already exists so the project is routine and RDAs cannot be claimed?

Answer:

In accordance with CAA 2001 Part 6 RDAs are available on capital expenditure incurred for...