What are Qualifying Direct Activities (QDA) and Qualifying Indirect Activities (QIA)?

As part of the Additional Information Form, you are required to provide a breakdown of which R&D expenditure costs are qualifying direct activities (QDA) or qualifying indirect activities (QIA). 

It is important to identify which costs involve indirect activities, as HMRC will expect you to provide details of which costs fall into this category.


What are qualifying direct activities (QDA)?

Qualifying direct activities (QDA) are specific tasks or actions that involve working directly on R&D. These activities are crucial for companies seeking to innovate and develop or improve products, processes or services.

Here are some examples of roles that may involve qualifying direct activities (QDA):

• Scientists.
• Researchers.
• Engineers.
• Technicians.

There are also specific activities that may qualify as direct:

• Experimental research: Conducting experiments to test new theories, hypotheses, or technologies in order to advance scientific knowledge and innovation.
• Prototyping and testing: Creating prototypes and conducting tests to evaluate the feasibility and functionality of new product designs or technological solutions.
• Data collection and analysis: Gathering and analysing data from various sources to understand trends, patterns and insights that can contribute to the development of new products or processes. This does not include market research.
• Technical design and development of new technologies: Engaging in the design and development of new technologies or processes that have the potential to bring about significant advancements in various industries. This does not include UX / UI design or 'aesthetic' design.
• Simulation and modelling: Utilising advanced software tools to simulate and model real-world scenarios or systems, allowing for the testing and optimisation of new ideas or concepts.
• Collaborative research: Participating in joint research projects or partnerships with other organisations, universities or research institutions to leverage collective expertise and resources in pursuit of innovative solutions.
• Documentation and reporting: Documenting research findings, methodologies and results in order to maintain a record of the R&D process and facilitate knowledge sharing within the company.

What are qualifying indirect activities (QIA)?

Qualifying indirect activities (QIA) are specific tasks or actions that are carried out to help support R&D work; these are typically individuals who worked more ‘indirectly’ on an R&D project, where it would be difficult to complete the R&D project without them. 

Typically, these are not scientific or technological roles but rather, supporting roles that assist with the progress of the R&D. These activities are often critical to the R&D process, therefore it is important to identify roles where indirect activities may be performed.

Here are some examples of roles that may involve qualifying indirect activities (QIA):

• Maintenance.
• Security.
• Admin and clerical.
• Finance and personnel.

There are also specific activities that may qualify as indirect:

• Research by students and researchers: This is usually carried out at universities.
• Research (including related data collection): To devise new scientific or technological testing, survey, or sampling methods, where this research is not R&D in its own right.
• Feasibility studies: To inform the strategic direction of a specific R&D activity.
• Training: This is usually training required to directly support an R&D project.
• R&D reports: The preparation and finalisation of your R&D findings.
• Maintenance, security, administration and clerical work: These activities are undertaken to support R&D.
• Finance and personnel: These activities are undertaken for R&D purposes.
• Ancillary activities, such as employing or contracting and paying staff, leasing laboratories and maintaining research and development equipment: This can include computers used for R&D purposes.

Question not answered?

Contact us via email at claims@empowerrd.com or alternatively, message us via the live chat.