R&D costs can be broadly broken down into three categories; Staff, Stuff and Subcons.
Staff time that is spent both directly and indirectly on R&D is typically one of the most significant areas of recovery, and is quantified through salary costs.
Stuff is an imperfect word to describe a category of costs not relating to people’s development time, like materials and software programs; every pound of these costs is a pound of qualifying expenditure.
Subcons are people who you pay to do R&D that are not on your payroll, such as other companies, technical consultants and agency staff; you only get 65% of these cost as qualifying expenditure.