Clinical trial costs reach an R&D claim through several categories: a dedicated category for payments to trial volunteers, staff costs for your own clinical and scientific team, consumables including investigational product used up in the trial, and payments to CROs and other subcontractors at 65%. The two complications are location and boundaries. Overseas trials qualify only through a narrow exception, and each study still has to sit within qualifying R&D activity.
Which cost categories cover a clinical trial?
Trial spending maps onto the standard categories set out in which costs qualify for R&D tax relief, plus one category that exists for trials specifically.
| Trial cost | Category | Notes |
|---|---|---|
| Payments to trial volunteers | Clinical trial volunteer payments | A qualifying category in its own right |
| Your clinical, scientific and data staff | Staff costs | Apportioned to time on qualifying activity |
| Investigational product, comparators, lab materials | Consumables | Must be used up or transformed in the R&D |
| CRO and other subcontracted work | Subcontracted R&D | 65% for unconnected providers; who claims depends on the contract |
| Agency and contract staff | Externally provided workers | 65% for unconnected providers; must be within UK PAYE and Class 1 NIC |
Volunteer payments are the distinctive line. They are a qualifying category in their own right, arising almost entirely in pharmaceutical, biotech and medtech claims, and they are easy to evidence if payment records are kept per study.
Do all trial phases qualify?
Not automatically. Qualifying R&D means seeking an advance in science or technology through resolving scientific or technological uncertainty that a competent professional could not readily resolve, and each study should be tested against that definition rather than assumed in. The full definition is explained in what counts as qualifying R&D.
In practice, early-phase studies sit comfortably inside it. A trial run to establish whether a candidate is safe, tolerated or effective is directed at exactly the kind of unresolved scientific question the definition describes. Later and post-authorisation studies need a closer look. Where a study gathers evidence about questions the science has already answered, for marketing or routine surveillance purposes, it is unlikely to qualify. Where it seeks to resolve remaining scientific uncertainty, it can. The honest position is that this is a study-by-study judgement, and it should be made by reference to the protocol and what your competent professionals say was genuinely unknown.
Can overseas trial costs qualify?
Sometimes, and clinical trials are the clearest case for the exception. The default rule for accounting periods beginning on or after 1 April 2024 is that subcontracted R&D qualifies only where the work is undertaken in the UK, and externally provided workers only where they are within UK PAYE and Class 1 NIC.
The exception, qualifying overseas expenditure, applies where conditions necessary for the R&D (geographical, environmental, social or regulatory) are not present in the UK and cannot reasonably be replicated here. A trial that needs a patient population the UK cannot provide, or that a regulator requires to be conducted in its own territory, is the textbook example. Cost and workforce availability are expressly excluded as justifications, so running a trial abroad because sites are cheaper or recruit faster does not get through. The rule, and how to build the evidence for an exception case before the spend, is covered in overseas R&D costs under the merged scheme.
Who claims when a CRO runs your trial?
Usually the sponsor. The customer claims contracted-out R&D where it intended or contemplated the specific R&D when the contract was made, and a sponsor commissioning a protocol-defined study almost always did. The CRO’s fees then enter the sponsor’s claim at 65% where the parties are unconnected. The position reverses where the sponsor is outside UK corporation tax, which is how UK CROs serving overseas sponsors claim in their own right. The contract mechanics, and a sponsor checklist, are in CRO contracts and R&D tax relief: who owns the claim?
What is trial spend worth in relief?
Under the merged scheme, £100,000 of qualifying expenditure produces a £20,000 gross credit: £15,000 net at the 25% corporation tax rate, or £16,200 for a loss-making company. Most clinical-stage companies are loss-making and heavily R&D-intensive, which is the profile Enhanced R&D Intensive Support (ERIS) exists for. A loss-making SME whose relevant R&D expenditure is at least 30% of total relevant expenditure can instead receive a payable credit worth up to 26.97p per £1: £26,970 on the same £100,000, and the credit is not taxable.
Both schemes cap payable credits at £20,000 plus 300% of relevant PAYE and NIC. That can bite where a trial programme is heavily outsourced and payroll is small, so settle the scheme position early in trial budgeting rather than at year end.
What should you document?
A trial claim stands or falls on records that already exist in a well-run study; the work is keeping them connected to the claim:
- the protocol and development plan, which evidence the scientific uncertainty and the activity boundaries
- contracts and work orders with CROs and sites, showing what was commissioned and where it is performed
- site locations for every work package, separating UK from overseas delivery
- volunteer payment records, per study
- the apportionment basis for staff time across studies and other work
- the written case for any qualifying overseas expenditure position, made at planning stage
HMRC checks roughly one in six R&D claims, and trial-heavy claims invite questions on location, subcontracting and activity boundaries in particular. Our guide to HMRC R&D enquiries sets out the process and how prepared claims hold up.
Clinical development rarely raises these questions in isolation: grant funding, long loss-making phases and CRO structures usually arrive together, and the sector picture is drawn on our life sciences R&D tax relief page. If you are planning a trial programme and want the claim position settled before contracts are signed, talk it through with a chartered adviser.
Written by Matthew Jones ACA CTA. Last reviewed July 2026.
Sources
- Check what R&D costs you can claim — the qualifying cost categories and the 65% restriction on payments to unconnected contractors.
- Draft guidance: contracting-out & overseas restrictions — the UK-location rule and the qualifying-overseas-expenditure exception.
- CIRD161000: contracted-out R&D — the intended-or-contemplated test for who claims contracted-out R&D.
This article describes the rules as they stood at the review date above. The rules change: for the current position, start with our guides or talk to us.
