Following discussion with HM Revenue & Customs we have updated our guidance on eligible project costs to take effect from 1 April 2017.
Previously eligible project costs were separated into direct and additional costs. Additional costs were defined as those costs linked to the project but were not related to the physical delivery of the project; these costs were capped at 10 per cent of the total project cost. The guidance on project costs now makes it clearer that eligible project costs are those that are necessary for the project to go ahead and directly lead to physical works and removes the two tier system of direct and additional costs. Some of those costs that were considered additional may still be eligible but only if they are necessary for the delivery of the physical works.
As the LCF in Scotland has now ended we have also updated our Guidance manual to reflect this change.