Clinical Trial Volunteer Payments for R&D Tax Credits

What HMRC Accepts

Clinical trial volunteer payments form a specific category of qualifying expenditure recognised in the legislation. The payments are claimable in full where the trial itself forms part of qualifying R&D activity under the BIS Guidelines on the Meaning of Research and Development for Tax Purposes.

The category exists to recognise a real cost of pharmaceutical, biotechnology, and medical device research: trials cannot run without volunteer participation, and paying volunteers reasonable compensation is standard ethical practice. The category removes doubt that these payments are qualifying expenditure.

When the Underlying Trial Qualifies

The volunteer payment category is conditional on the underlying R&D qualifying. A trial qualifies where it seeks to resolve genuine scientific or technological uncertainty. The classic examples are:

• Phase I, II, III, and IV clinical trials of a new pharmaceutical compound.
• First-in-human trials of a medical device.
• Clinical validation studies for a novel diagnostic test.
• Volunteer-based research into new treatment protocols.

Trials that are essentially confirmatory (repeat studies of an established product for marketing approval in an additional geography, without scientific or technological uncertainty) are less likely to qualify on the underlying activity test.

What Is Included

• Honoraria or compensation payments to volunteers for time and inconvenience.
• Travel reimbursement (mileage, public transport, taxi fares).
• Subsistence and meal payments during trial visits.
• Accommodation costs where overnight stays are required.
• Parking fees at trial sites.
• Reasonable payments for follow-up visits and long-term monitoring.

What Is NOT Included

• Research staff salaries (these fall under staffing costs).
• Payments to clinicians for trial supervision (typically staffing or subcontractor cost).
• Investigator fees paid to trial sites (subcontractor cost).
• Trial insurance, ethics committee fees, and regulatory submission costs (other categories).
• Payments to volunteers for trials that do not qualify as R&D activity.
• Payments clearly in excess of reasonable compensation (for example, payments that look like remuneration rather than honoraria).

Documentation and Ethics

HMRC may ask for evidence that the underlying trial is a qualifying R&D activity and that the volunteer payments are reasonable and ethically approved. A good evidence pack typically contains:

• The ethics committee approval for the trial.
• The trial protocol summary.
• The volunteer participant information sheet and consent form template.
• A schedule of payments per volunteer visit, with amounts.
• Payment records (bank transfers, receipts, or payment vouchers).
• Evidence that payment levels are consistent with industry norms and ethics committee guidance.

Common Enquiry Risks

• Underlying trial does not qualify as R&D. Routine confirmatory work is a common weakness.
• Payments above reasonable levels. HMRC may challenge amounts that look like remuneration.
• Mixing volunteer payments with investigator fees. These are different cost categories.
• Weak documentation of ethics approval. Ethics evidence is routinely requested.
• Non-UK trial volunteers. The same qualifying analysis applies; the merged scheme subcontractor rules do not directly affect volunteer payments, but specialist advice is recommended.

Worked Example (Indicative)

A small UK biotech runs a phase II clinical trial for a novel therapeutic compound in the year to 31 March 2026. The trial is ethically approved and addresses genuine scientific uncertainty. 120 volunteers attend four visits each. Honoraria per visit are £150, with additional travel and subsistence averaging £40 per visit.

Total volunteer payments: 120 volunteers x 4 visits x £190 per visit = £91,200.

At the 20% merged scheme credit rate, this contributes £18,240 gross credit; net benefit approximately £13,680 after corporation tax at 25%. As a loss-making R&D-intensive biotech qualifying for ERIS at 27%, the gross credit would be £24,624. Figures are indicative.

Trial Phases and the Qualifying Test

Clinical trials run in phases, each with a different primary purpose. The R&D qualifying analysis plays out differently across the phases.

Phase I. First-in-human studies, typically small-scale, focused on safety and pharmacokinetics. Almost always qualifying R&D: the scientific uncertainty is high and the activity is classic research.

Phase II. Larger studies exploring efficacy and optimal dosing. Usually qualifying R&D where the efficacy question remains genuinely uncertain at the start of the trial.

Phase III. Large-scale confirmatory trials for regulatory approval. Usually qualifying where the primary endpoint remains uncertain and the trial is contributing to scientific knowledge. Less clearly qualifying where the trial is primarily confirmatory of known efficacy in a minor population variation.

Phase IV. Post-marketing surveillance and real-world evidence studies. Often outside qualifying R&D unless a specific new scientific question is being investigated.

The qualifying analysis is fact-specific. A specialist adviser will map the trial design against the BIS Guidelines test.

Payment Reasonableness and Ethics Committee Guidance

Volunteer payment levels are scrutinised by ethics committees and by HMRC for different reasons. Ethics committees are concerned that payments not be so high as to constitute undue inducement. HMRC is concerned that payments not be so high as to constitute disguised remuneration or unrelated cost.

Typical UK payment ranges (indicative, subject to trial design):

• Short outpatient visit: £40-100 honorarium plus travel.
• Half-day visit with blood sampling: £100-200 honorarium plus travel and subsistence.
• Overnight residential stay in phase I: £150-400 per night plus travel.
• Specialist trial with significant intervention: higher figures, typically approved by the ethics committee against the specific risk and burden.

Payments should be documented in advance, approved by the ethics committee, consistent across volunteers, and supported by the protocol. Paying more than the ethics-approved level undermines the claim; paying less does not increase it.

Clinical Trials for Medical Devices

Medical device R&D uses human volunteers in a slightly different regulatory framework from pharmaceuticals, but the R&D tax credit treatment is similar. Volunteer payments for device evaluation studies, usability testing in clinical settings, and performance validation studies are claimable where the underlying R&D qualifies.

Device trials sometimes have a lower volunteer payment profile than pharmaceutical trials because the intervention is less invasive, but the principles are the same: reasonable compensation for time and inconvenience, ethics committee approval, and documented payment schedules.

Documentation for Volunteer Payment Claims

• Ethics committee approval letter and protocol summary.
• Volunteer information sheet and consent form template.
• Payment schedule per protocol visit.
• Payment records (payroll extracts, bank transfer records, voucher receipts).
• Evidence of the trial's R&D qualification (project narrative, scientific uncertainty analysis).
• Reconciliation between cumulative payments and the claim figure.

Real-World Evidence and Observational Studies

Not all research involving human subjects is a clinical trial. Observational studies, real-world evidence generation, and epidemiological research may involve volunteer participation and may or may not qualify as R&D depending on the scientific question being addressed.

Where an observational study is designed to resolve a genuine scientific uncertainty (for example, a rare-disease registry aimed at characterising a novel disease mechanism), volunteer payments and associated R&D cost can qualify. Where the study is essentially a marketing exercise or a routine surveillance activity with no scientific uncertainty, it falls outside the rules.

Medical Device Usability and Clinical Evaluation

Medical device developers run clinical evaluation studies under different regulatory standards from pharmaceutical trials. Usability testing, clinical performance evaluation, and feasibility studies involving human subjects can produce qualifying volunteer payments where the underlying R&D resolves scientific or technological uncertainty.

Typical claimable payments include honoraria for subjects participating in device evaluation sessions, travel reimbursement, and compensation for time. As with pharmaceutical trials, the underlying R&D has to qualify for the payments to flow through.

Non-UK Volunteers

The merged scheme subcontractor UK provision rules affect how trials run outside the UK are treated, but they apply primarily to subcontractor and EPW costs. Volunteer payments themselves are a separate cost category and are not directly caught by the subcontractor UK provision rule.

However, where the trial itself is run by an overseas CRO, the CRO's fees may fall under the subcontractor category with the UK provision consequences. In practice, a trial run entirely overseas often loses a significant share of its claim under the merged scheme because the CRO costs become non-claimable, even if the volunteer payments remain in scope.

For context on the subcontractor UK provision rule, see our dedicated page: Subcontractors for R&D Tax Credits.

Accruals and Recognition Timing

Volunteer payments are claimable in the period they are incurred, which is typically the period the trial visits take place. A multi-year trial spreads the payments across the relevant accounting periods. A trial that straddles a year-end is apportioned based on actual visits, not on expected visits.

Advance payments held against future visits (for example, a budget committed to a clinical site at the start of the trial) are not claimable until the underlying activity takes place. Payments committed but not yet made for work already done are claimable as accruals in the period of the work.

The Ethics Committee's Role in the Evidence Base

HMRC's scrutiny of volunteer payment claims often focuses on whether the trial design was genuinely R&D and whether the payment levels were reasonable. The ethics committee's approval letter, protocol review, and payment-schedule approval provide the single strongest piece of evidence on both questions.

An R&D claim built on trials with clean ethics approval documentation tends to move through HMRC review more quickly than one lacking that evidence. A specialist adviser will ensure the ethics documentation is correctly filed against the claim.

Per-Visit Payment Schedules and Budget Planning

A well-structured clinical trial budget itemises volunteer payments per protocol visit. The schedule typically sets out honoraria, travel, subsistence, and accommodation per visit, with totals per volunteer and for the cohort overall.

For the R&D claim, the per-visit schedule provides the evidence base. Total claimable payments = volunteers x visits completed x per-visit payment, reconciled to actual bank transfers or voucher issuances.

Where the trial enrols slower than planned, the claim is for the actual volunteers and visits, not the planned figures. A trial budget of 150 volunteers that enrols 120 produces a claim based on 120 volunteers.

Payment Methods and Tax Treatment for Volunteers

Volunteer honoraria are typically paid by bank transfer, voucher, or cheque, and are not subject to PAYE in the normal sense (volunteers are not employees). The volunteer's own tax treatment is a separate matter; for the company's R&D claim, the amount paid is the claimable figure.

Where volunteer payments flow through a clinical site rather than directly from the sponsor, the site's invoice to the sponsor contains the volunteer payment component. The R&D claim can still capture this component, supported by the site's underlying payment records.

Volunteer Recruitment and Advertising

Recruitment of clinical trial volunteers typically involves advertising, screening, and eligibility assessment. The cost treatment varies.

Payments to volunteers who attend screening visits but are not enrolled are generally part of the volunteer payment category (they still incurred time and inconvenience). Advertising fees paid to external agencies to recruit volunteers are typically outside the rules as marketing cost, though a specialist adviser may apply a narrower interpretation where the advertising is technically essential to the R&D activity.

Screening costs paid to clinical sites are typically subcontractor cost (third-party clinical work delivered under a statement of work).

Trial Insurance and Indemnity

Clinical trial insurance and indemnity costs are typically separate from volunteer payment costs. They are generally outside the R&D tax credit rules as insurance is a commercial overhead rather than a direct R&D input.

A specialist adviser will distinguish trial insurance (outside the rules) from specific risk-related payments to volunteers (inside the volunteer payment category).

Site Fees and Investigator Costs

Payments to clinical trial sites and principal investigators are typically subcontractor cost rather than volunteer payment cost. A clinical site invoice that bundles volunteer honoraria with site management fees should be unbundled for the R&D claim, with volunteer payments going under this category and site management fees going under subcontractors.

Where the unbundling is impractical, a specialist adviser will apply a defensible allocation methodology consistent with the trial's cost structure.

Related Cost Categories

• Staffing costs — for in-house research and clinical staff.
• Subcontractors — for contract research organisations and trial sites.
• Consumables — for trial materials and reagents.