The expenditure must be revenue in nature. If it is capital then enhanced R&D relief will not be available but 100% capital allowances may be.
The revenue must come within the following headings:
- Staffing costs
- Software or consumable items
- Externally provided workers
This means that common expenditure on items such as rent, insurance, legal and professional fees, advertising and so forth cannot be claimed as they do not fit under any of these headings.