One of the conditions for a company to make an R&D tax credit claim is that the qualifying R&D activity must be carried out by the claimant company. There are two situations in which relief is available to a company that has not carried out all the qualifying R&D work:
A company which carries out qualifying R&D activities and pays a university or institute of higher education to carry out qualifying R&D activities can claim credits, limited to 5% of the expenditure incurred by the company itself on R&D activities or €100,000, whichever is greater
A company which carries out qualifying R&D activities and pays another person who is not a connected party to carry out qualifying R&D activities for the company can claim credits, restricted to 15% of the expenditure incurred by the company itself on R&D activities or €100,000, whichever is greater.
In either case, the company must incur at least the same level of expenditure on qualifying activities which it carried out itself, and the subcontracted activity must qualify as R&D in its own right. The Company must notify the subcontracted party in writing that they may not make an R&D tax credit claim for these activities.