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Reference
CIRD reference index: HMRC's R&D manual
What CIRD is, and what a paragraph number gives you
CIRD is HMRC's Corporate Intangibles Research and Development Manual, the guidance HMRC
gives its own officers on R&D tax relief. An enquiry letter usually quotes a paragraph
number from it, such as CIRD81910, and the number on its own tells
you nothing. Find yours below for HMRC's title, the revision date, the pages where we apply
it, and on almost every row what the paragraph means for a company preparing or defending a
claim.
The Corporate Intangibles Research and Development Manual is HMRC's guidance to its own
officers, published under its transparency commitments. Most enquiry correspondence quotes
a paragraph number from it.
It is HMRC's view of the law. It is not the law. The law is CTA 2009 Part 13, and CTA 2010
Part 8A for Patent Box, read with the DSIT Guidelines, which take their force from s1006
ITA 2007. Where the manual and the statute part company the statute governs, and a
paragraph is evidence of HMRC's position rather than authority for a proposition. Two
paragraphs here show why that distinction is worth holding. HMRC amended
CIRD81650 and CIRD84250 on 27 February
2025, after the First-tier Tribunal decided
Collins Construction and
Stage One Creative Services
against the view those paragraphs had stated; both now carry a note saying the guidance
reflects HMRC's view following recent First-tier Tribunal decisions. In the
Research and Development Communication Forum minutes of 6 May 2025
HMRC recorded that it accepts the decisions and has updated its position. The same minutes
record that HMRC did not establish a correction mechanism of the kind it used for
reimbursed expenses, so companies that had followed the earlier wording were given no route
back.
The numbering is the second thing to know. The manual carries three overlapping layers:
the pre-April-2024 SME and RDEC schemes from CIRD80000, the reformed reliefs from
CIRD100000, and Patent Box from CIRD200000. The same topic therefore lives at two numbers.
Staffing costs are measured at CIRD83200 under the old schemes
and at CIRD133100 under the current ones; subcontracted work
sits at CIRD84250 and
CIRD161000. Quoting the paragraph from the wrong layer at HMRC
concedes ground that did not need conceding. The chapters below keep the layers apart and
each one says which layer it belongs to.
To use the index: search for a number, a phrase from a title or a word from a statement —
81910, subsid and
PAYE cap all land. Each paragraph number opens the paragraph
on gov.uk. Applied in opens our own guidance on the point, which is where the
argument is rather than the summary. Every row has its own address, so
/rd-tax-relief/cird/#cird81910 links to a single paragraph and keeps
working.
The date in each row is the date HMRC last revised that paragraph. It is not the date on
gov.uk's own Updated line, which reports when any part of the whole manual last
changed and reads the same on all 80.
The index
The 80 paragraphs our published guidance relies on, cited across 97
of our pages. It is not the whole manual. Every one was fetched from gov.uk and checked
on 14 September 2026.
Showing all 80 paragraphs.
CIRD paragraphs cited in LimestoneGrey's R&D tax relief guidance, grouped by chapter,
with HMRC's title, a one-line statement of what the paragraph says, the date HMRC last
revised it, and the pages where we apply it.
Paragraph
HMRC title
What it says
Revised
Applied in
CIRD80500Examining a claimPre-April 2024 schemes4 paragraphs
Sets out how HMRC officers examine an R&D claim: paying credits quickly, the plain-language questions normally put to the company, and the course to take where agreement cannot be reached.In a claim:Where HMRC opens an enquiry without paying, this is the paragraph asking its officers to keep a partial payment under review.
HMRC's practice note for ISBC and WMBC, stating the aim to pay 85% of payable tax credits or make contact within 40 days, and to open an enquiry within 60 days where it decides not to pay.In a claim:The published 40-day aim to quote when a payable credit runs late. The same page sets out when HMRC withholds payment instead.
States that there is no record-keeping requirement specific to R&D relief, the general CTSA obligation applying instead, so officers should be flexible about which records assist a claim.In a claim:Answers a demand for R&D-specific records as of right. There is no such requirement, the general company tax obligation applies, and officers are asked to be flexible about what assists.
Describes the project-planning and progress material HMRC would commonly expect for an R&D project, and notes that background publicity material is rarely conclusive evidence that R&D is taking place.In a claim:The nearest thing HMRC gives to a list of what a project evidence file should hold. It adds that background publicity material is rarely conclusive evidence that R&D took place.
R&D tax relief: conditions to be satisfied: company a going concern
States the going-concern condition at ss 1046, 1057 and 104T CTA 2009, the relevant-group-transfer easement for periods commencing after 31 March 2023, and that a company in administration or liquidation cannot claim.In a claim:Pre-April-2024 periods only, and it still frames the condition around sections 1046, 1057 and 104T rather than the current 1112F and 1112G. Read the statute before relying on it.
R&D tax relief: conditions to be satisfied: total aid to project €7.5m or less (SME and vaccines schemes only)
Sets the EUR 7.5m limit on total aid to any one R&D project under the SME and vaccines schemes from 1 August 2008, and gives the statutory formula for measuring that aid.In a claim:The ceiling on an old-scheme SME claim. It applies per project rather than per company, and the aid is measured net of large company relief.
R&D tax relief: conditions to be satisfied: company subject to CT
States that relief is available only to companies within the charge to corporation tax in respect of profits charged to it, 'company' excluding partnerships and local authorities.In a claim:The starting point where a claimant's legal form is in doubt. A partnership is not a company, and HMRC extends the principle to UK permanent establishments.
R&D tax relief: conditions to be satisfied: company as member of partnership
Explains that s1259 CTA 2009 computes partnership profit on corporation tax principles for the corporate member only, so R&D relief reaches that member but payable tax credit cannot be claimed.In a claim:A corporate partner can reach the relief but not the cash. On HMRC's reading section 1259 fixes that member's profit and no payable tax credit follows.
R&D tax relief: conditions to be satisfied: the definition of R&D for tax purposes
Sets out the definition of R&D for tax purposes — the GAAP test in s1138 CTA 2010 read with the Guidelines — and what is expected of a competent professional working in the field.In a claim:HMRC's restatement of the Guidelines tests, amended 19 January 2026. It carries HMRC's description of a competent professional: knowledge of the current state of the field, accumulated experience and a recognised track record.
R&D tax relief: conditions to be satisfied: production and distribution of goods and services
Gives HMRC's understanding of the exclusion of 'production and distribution of goods and services' at paragraph 28(c) of the Guidelines, and how costs are split where R&D continues after the company starts making goods or services for supply to a customer.In a claim:Separates a prototype, a single-purpose unit not built for sale, from a first-of-class item intended for sale from the outset, whose total build costs are not expected to qualify. Services are considered the same way as goods.
R&D tax relief: conditions to be satisfied: relevant R&D
Defines relevant R&D under s1042 CTA 2009 as R&D related to a trade the company carries on, or from which an intended trade will be derived.In a claim:The trade link. The second limb reaches R&D from which an intended trade will be derived, but on its own it gives a company that has not started trading nothing to claim.
R&D tax relief: conditions to be satisfied: allowable as a deduction in computing the profit
States that qualifying expenditure must be allowable as a deduction in computing trade profits, and that s1308 CTA 2009 allows capitalised revenue expenditure to be deducted when incurred without a second deduction on amortisation.In a claim:Capitalised development costs are not lost. Section 1308 deducts them when incurred, with no second deduction on amortisation, so the computation and the accounts diverge.
R&D tax relief: conditions to be satisfied: minimum expenditure
Records the £10,000 minimum qualifying expenditure in a 12-month accounting period, pro-rated for shorter periods, and its removal for accounting periods ending on or after 1 April 2012.
R&D tax relief: conditions to be satisfied: subsidies (SME scheme only)
Explains that SME-scheme relief is unavailable for subsidised expenditure and sets out, as amended after First-tier Tribunal decisions, what HMRC does and does not treat as subsidised — including that payments received where the R&D was not contracted to the company do not subsidise it unless the payment is specifically linked to those activities.In a claim:HMRC rewrote this paragraph on 27 February 2025 after Collins Construction and Stage One Creative Services. An enquiry letter quoting the earlier wording is quoting guidance HMRC has since changed.
R&D tax relief: conditions to be satisfied: effect of notified State aid
Explains that a company receiving a notified State aid for an R&D project cannot claim SME relief for that project, and that general measures including RDEC are not notified State aid.In a claim:A notified State aid on a project blocks SME relief for that project, not merely for the funded part. RDEC was the alternative route for those costs.
R&D tax relief: conditions to be satisfied: capital expenditure
States that capital expenditure is excluded from qualifying R&D expenditure because it is not deductible in computing trade profits, though it may instead qualify for R&D allowances.In a claim:Capital spend is not simply lost. It may qualify instead for R&D allowances, and HMRC cross-refers to the Capital Allowances Manual at CA60000 onwards.
R&D tax relief: conditions to be satisfied: SME scheme claims and time limits
Sets out how an R&D claim is made, amended or withdrawn in the company tax return, the additional information and claim-notification requirements, and the time limits at FA 1998 Sch 18 para 83E, including the 30-day route into RDEC where a closure notice removes an SME claim.In a claim:The claim window is two years from the end of the period of account, and HMRC exercises its late-claim discretion only under Statement of Practice 5 (2001).
R&D tax relief: conditions to be satisfied: restriction of nominations and assignments
States that for claims made on or after 1 April 2024 HMRC generally pays R&D credits only to the claimant company, and that new assignments made on or after 22 November 2023 are void.In a claim:For claims made on or after 1 April 2024 HMRC generally pays the claimant company, which gives its own payment details on the CT600. Check the engagement terms: assignments made on or after 22 November 2023 are void.
R&D tax relief: conditions to be satisfied: BIS Guidelines (formerly DTI Guidelines) (2004) - text
Reproduces the 2004 DTI/BIS Guidelines, which apply to accounting periods beginning before 1 April 2023, with HMRC's notes on the entries now out of date.In a claim:Accounting periods beginning before 1 April 2023 only. It carries the superseded position on mathematics, so quoting it on a later period concedes the wrong test.
R&D tax relief: conditions to be satisfied: DSIT Guidelines (2023) - text
Reproduces the 2023 DSIT Guidelines, introduced by SI 2023/293 and applying to accounting periods beginning after 31 March 2023, including the closed list of qualifying indirect activities at paragraph 31.In a claim:The Guidelines in force for any accounting period beginning after 31 March 2023. Paragraph 31's list of qualifying indirect activities is closed.
R&D tax relief: conditions to be satisfied: BIS Guidelines (formerly DTI Guidelines) (2004) - application to software
Applies the Guidelines' concepts of advance, technological uncertainty and project boundary to software work, stating that the advance must be in overall knowledge or capability in the field, not in the company's own knowledge or capability alone.In a claim:The advance has to lie in the underlying technology rather than in the product, and not merely in what the company itself did not know. That distinction, applied honestly, decides most software claims.
R&D tax reliefs: categories of qualifying expenditure: overview
Traces how the categories of qualifying expenditure were introduced and changed from the SME scheme's inception onwards, and lists the categories carrying a paid requirement.In a claim:Check the paid requirement here. It reaches computer software, data licences and cloud computing services for accounting periods beginning on or after 1 April 2023.
R&D tax relief: categories of qualifying expenditure: consumable items
States that revenue expenditure on consumable items employed directly in R&D qualifies, and sets out the s1126A CTA 2009 restriction where items produced in the R&D are transferred in the ordinary course of business.In a claim:Where an item the R&D produced is transferred in the ordinary course of business, s1126A takes the consumables in it out. HMRC's examples run through a sold kiln and a soft-drink production process.
R&D tax relief: categories of qualifying expenditure: consumable items - meaning of consumed or transformed
Explains that consumable items are those used by the R&D and no longer usable in their original form because they are finished up or transformed, notes that statute includes water, fuel and power, and gives laboratory chemicals and components integrated into a larger prototype as examples.In a claim:Components built into a larger prototype count as transformed. Selling that prototype afterwards then brings the section 1126A restriction into play.
R&D tax relief: categories of qualifying expenditure: staffing costs
States that only the staffing costs of the company's own directors and employees directly and actively engaged in relevant R&D qualify, apportioned where engagement is partial.In a claim:Only the claimant company's own directors and employees sit in this head. Anyone supplied by another party belongs in a different category.
R&D tax relief: categories of qualifying expenditure: staffing costs - measure of
Gives the measure of staffing costs under s1123 CTA 2009 as emoluments other than benefits in kind, secondary class 1 national insurance contributions and company pension contributions.In a claim:Benefits in kind are out and cash reimbursements are not. A reimbursed expense qualifies where the employee paid it to meet the requirements of the employment; redundancy payments do not.
R&D tax relief: categories of qualifying expenditure: employee partly engaged on R&D
States that an appropriate proportion of staffing costs qualifies where a director or employee is only partly directly and actively engaged in relevant R&D, and records the earlier 80:20 arrangement.In a claim:The basis for apportioning a part-time R&D employee's cost. The pre-2003 80/20 arrangement recorded here was abandoned and cannot be used now.
R&D tax reliefs: categories of qualifying expenditure: externally provided workers
Sets out the externally provided worker category at ss 1127-1132 CTA 2009, distinguishing the provision of staff from contracted-out work, and gives the 65% measure for unconnected staff providers.In a claim:The line between hiring people and contracting work out. A cost put in the wrong category enters the claim on the wrong basis.
R&D tax relief: categories of qualifying expenditure: externally provided workers - definition
Lists the conditions at s1128 CTA 2009 for an individual to be an externally provided worker, including supply by or through a staff provider and services that do not constitute activities contracted out by the company.In a claim:A payment to a directly engaged self-employed consultant is not an externally provided worker payment. A staff provider has to sit between the company and the individual.
R&D tax relief: categories of qualifying expenditure: subcontracted activities - meaning of subcontracted
States that expenditure on activities contracted to the company by another person is not qualifying expenditure under the SME scheme, and lists, in order of likely weight, the factors bearing on whether activities were contracted to it.In a claim:Rewritten on 27 February 2025 after HMRC's tribunal losses. It now lists first that R&D incidental to the supply of a product or service is not contracted out.
Describes RDEC, introduced by Finance Act 2013 for expenditure incurred on or after 1 April 2013, as a stand-alone credit brought into account as a receipt in calculating profits.In a claim:The above-the-line architecture the merged scheme carried over: a receipt in the profit calculation rather than a reduction in tax.
Sets the pre-merger RDEC rate at 20% of qualifying expenditure for expenditure incurred on or after 1 April 2023, up from 13%, and lists the steps through which the payable element is restricted.In a claim:For expenditure before the merged scheme. A backdated claim is computed at 13%, or at 20% for expenditure incurred on or after 1 April 2023.
States that a payable RDEC may be claimed only where the company is a going concern when the claim is made — latest published accounts prepared on that basis, and not in reliance on receiving the credit — and that a company in administration or liquidation cannot claim, though one that comes out of administration can if it is still in time.In a claim:Pre-merger RDEC only. For an accounting period beginning on or after 1 April 2024 the going concern condition is at CIRD191000.
R&D Tax reliefs: R&D expenditure credit (RDEC) scheme: company as a member of a partnership
States that where a company carries out R&D as a member of a partnership the expenditure credit is claimed by the corporate partner in its CT600 on its share of the expenditure.In a claim:The corporate partner claims on its share in its own CT600 and accounts for the credit as a taxable receipt.
States that RDEC is a stand-alone credit rather than a deduction in calculating the corporation tax liability, so it cannot enter the calculation of quarterly instalment payments.In a claim:The credit does not reduce a quarterly instalment payment, so instalments are computed as though it were not there.
Outlines the SME scheme as enhanced deductions with a payable credit for surrendered losses, and notes that its State aid status required changes to be notified to and approved by the EU.In a claim:Its State aid status is the reason a notified State aid on a project blocks SME relief. Read with CIRD81650 and CIRD81670.
R&D tax relief: SME definition: staff headcount, turnover and balance sheet total
Explains how staff headcount, turnover and balance sheet total are measured for the EC SME Recommendation tests, including who counts as staff and the conversion of accounts into euros.In a claim:Use it where a company sits near the line: it settles who counts as staff and which year-end figures the euro conversion applies to.
R&D tax relief: SME definitions: increases in thresholds
States the widened R&D thresholds applying to expenditure incurred on or after 1 August 2008: fewer than 500 staff and either turnover of EUR 100m or less or a balance sheet total of EUR 86m or less.In a claim:The R&D thresholds are their own: fewer than 500 staff, and either turnover of €100m or less or a balance sheet total of €86m or less.
R&D tax relief: SME definition: change of status to and from SME
Sets out the transition rule under which crossing a headcount or financial threshold changes SME status only once the position is repeated for a second consecutive year, and the cases where that rule does not apply.In a claim:Crossing a threshold does not change status until the position repeats in a second consecutive year. HMRC works an example at 480 and 510 employees. The transition is disregarded where a partner or linked enterprise already exceeded a threshold on its own figures.
R&D Tax Reliefs: reformed reliefs: new RDEC: overview
Introduces the merged scheme RDEC in Chapter 1A of Part 13 CTA 2009 for accounting periods beginning on or after 1 April 2024, and lists how it differs from the scheme it replaced.In a claim:Only a company with a trade chargeable to UK corporation tax can claim, and an ineligible company cannot.
R&D Tax Reliefs: reformed reliefs: new RDEC: calculation: payment steps
Walks through the seven payment steps at s1042I CTA 2009, from discharging the period's corporation tax to the amount payable, and states that the steps also run on an amount carried forward under step 3 with no new claim.In a claim:The order the steps run in decides whether cash reaches the company at all. Step 6 applies the credit against other HMRC debts, VAT, PAYE and contract settlements included.
Introduces enhanced R&D intensive support under Chapter 2 of Part 13 CTA 2009 for loss-making R&D-intensive SMEs in accounting periods beginning on or after 1 April 2024, and lists its features.In a claim:A route for loss-making, R&D-intensive SMEs only. Expenditure attributable to an exempt foreign permanent establishment cannot qualify.
Gives the ERIS calculation for trading companies: an additional deduction at 86% of qualifying Chapter 2 expenditure, and surrender of all or part of the surrenderable loss — the lower of 186% of that expenditure and the unrelieved loss — for a tax credit at 14.5%, subject to the PAYE cap.In a claim:The surrender is effected by writing the losses off in the tax computations, so the computation has to agree with the claim.
Explains the R&D intensity condition at s1045ZA CTA 2009 — 30% or more for accounting periods beginning on or after 1 April 2024, 40% or more under the retrospective old SME scheme provision — computed across the claimant and all connected companies wherever based.In a claim:The ratio is measured across the claimant and every connected company, wherever based, so an overseas sister with heavy non-R&D costs can pull the ratio below 30%. A one-year grace period covers a single bad year.
Sets out the Northern Ireland ERIS provisions: no overseas restriction on contractor and externally provided worker payments, but a three-year de minimis State aid limit on the additional benefit amount, with merged scheme RDEC above it.In a claim:The de minimis limit applies to the additional benefit amount of every claim made under Northern Ireland ERIS, whether or not the company holds a grant.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: staffing costs
States that only staffing costs of directors or employees directly and actively engaged in relevant R&D qualify under the reformed reliefs, including the closed list of qualifying indirect activities at paragraph 31 of the DSIT Guidelines.In a claim:Paragraph 31's list is exhaustive, the activity has to form part of an R&D project, and support of support does not qualify.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: staffing costs: measure of staffing costs
Gives the measure of staffing costs under the reformed reliefs as emoluments other than benefits in kind, secondary class 1 national insurance contributions and company pension contributions.In a claim:The current-scheme twin of CIRD83200. Quote this one for an accounting period beginning on or after 1 April 2024.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: data licenses and cloud computing services
States that data licence and cloud computing service costs qualify under both the merged scheme and ERIS where employed in activities directly contributing to the resolution of scientific or technological uncertainty, but not where attributable to qualifying indirect activities.In a claim:Cloud and data costs attributable to qualifying indirect activities do not qualify, so the apportionment has to separate them from directly contributing use.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: software, data licenses, cloud computing services and consumables: consumable items
States that revenue expenditure on consumable items employed directly in R&D qualifies under both the merged scheme and ERIS, and applies the s1126A CTA 2009 restriction for items transferred in the ordinary course of business.In a claim:The current-scheme twin of CIRD82300, and the treatment is the same. Quote this one for an accounting period beginning on or after 1 April 2024.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: externally provided workers
Sets out the externally provided worker category under the reformed reliefs at ss 1127-1132A CTA 2009, including the qualifying earnings restriction and 65% of the payment attributable to qualifying earnings for unconnected parties.In a claim:Unconnected providers at 65%, the lower-of basis where the parties are connected, and a qualifying earnings restriction the old category did not carry.
R&D Tax Reliefs: reformed reliefs: categories of qualifying expenditure: contractor payments
Defines a contractor payment as a payment for contracted out R&D to the person it is contracted out to, and gives 65% of the relevant portion for unconnected contractors and the connected-party measure.In a claim:65% for an unconnected contractor, the connected-party measure within a group, and a joint election to be treated as connected that must be made within two years of the end of the accounting period in which the contract was entered into, and cannot be extended.
Sets the PAYE cap for both the merged scheme and ERIS at s1112B CTA 2009 as £20,000 plus 300% of the company's relevant PAYE and national insurance liabilities, with the £20,000 reduced proportionately for a short period, and the s1112E exemption for companies actively managing intellectual property.In a claim:Where the cap bites, the merged scheme carries the restricted amount forward and ERIS does not. That difference decides which scheme is worth more to a small-payroll claimant.
States the general rule excluding externally provided worker payments outside UK PAYE and contractor payments for R&D undertaken overseas, and the s1138A CTA 2009 exception where conditions necessary for the R&D are absent from the UK, present at the overseas location and wholly unreasonable for the company to replicate here.In a claim:The asymmetry is the point. HMRC's list of conditions that can support the exception is open, while the list of conditions to be disregarded is exhaustive.
Gives HMRC's non-exhaustive view of the conditions at s1138A(3)(a) CTA 2009, grouped as geographical, environmental and social conditions and as legal or regulatory requirements.In a claim:HMRC's examples move. On 25 August 2026 it dropped environmental sustainability from them and put reliability of access to materials essential to the R&D in its place.
States that s1138A(3)(b) CTA 2009 excludes only two matters from being conditions — the cost of the R&D activity and the availability of workers to carry it out — and that this list is exhaustive.In a claim:Cost and worker availability can never be conditions. An overseas argument resting on either of them fails here.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: overview
Defines contracted out R&D at s1133 CTA 2009, turning on whether, having regard to the terms of the contract and any surrounding circumstances, it is reasonable to assume the customer intended or contemplated that R&D of that sort would be undertaken.In a claim:Decides which side of a contract claims. HMRC takes the general rule to be the party that decides to undertake or initiate the R&D, with intellectual property ownership, financial risk and autonomy weighed as surrounding circumstances rather than as the test.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: concise examples
Gives seven concise worked examples — 1 to 6 with a 1A variant — applying the contracted out R&D rules, covering contractual chains, an irrelievable client, a contract variation, and a chain including a company outside the charge to UK corporation tax.In a claim:Example 5 is the chain case: a UK customer contracts to an overseas company which passes the work to its UK subsidiary, and the subsidiary cannot claim because the condition is not met by the customer at the top of the chain.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: more detailed examples
Gives HMRC's longer worked examples on contracted out R&D, covering specification and expertise, financial risk, group arrangements and contracts with parties outside the charge to UK corporation tax.In a claim:Covers the contract research organisation running trials for customers outside the charge to UK corporation tax, which can claim in its own right.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: ineligible companies
Lists the ineligible companies at s1142 CTA 2009 — a charity, an institution of higher education, a scientific research organisation and a health service body — which cannot claim R&D tax relief.In a claim:A contractor doing R&D for a charity, a university, a scientific research organisation or a health service body claims in its own right.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: group election
Explains the revocable joint election at s1142(5) CTA 2009 under which a group company contracting R&D out to another is treated as ineligible, with no limit on the number of elections a group may make.In a claim:The election is made by notice in writing before or at the same time as the claim that depends on it, and a group may make as many as it needs.
R&D Tax Reliefs: reformed reliefs: contracted out R&D: transitional provisions
Sets out the Finance Act 2024 transitional provisions for contracted out R&D, which HMRC says exist “to avoid overlap and gaps in entitlement” where one company's expenditure falls in an accounting period beginning before 1 April 2024 and the other's falls after it.In a claim:Where the two parties' accounting periods fall on either side of 1 April 2024, this is the paragraph that decides which of them claims, and it can reverse the answer the ordinary s1133 test reaches, so both year ends belong on the table before either company files.
Sets out the claims framework for both reformed schemes at FA 1998 Sch 18 Part IXA: the additional information form, claim notification where required, and the return contents that make a claim valid.In a claim:A valid claim needs the CT600, computations reflecting it, a CT600L where a payable credit is claimed, and the amount quantified in the return.
R&D Tax Reliefs: reformed reliefs: claims process: additional information form
Explains the additional information requirement at FA 1998 Sch 18 para 83EA, which has effect for claims made on or after 1 August 2023 — in practice 8 August 2023 — and lists the information SI 2023/813 requires on the form.In a claim:A claim made without the form is invalid, and the accounting period dates on the form have to match the return.
R&D Tax Reliefs: reformed reliefs: claims process: pre-notification of claims
Bars merged-scheme and ERIS claims made after the claim notification period — which ends on the last day of the six months beginning with the day after the period of account ends — unless the company notified within it, claimed or notified for another accounting period in the same period of account, or made an R&D claim in the three years ending with the notification deadline, disregarding a claim for a period beginning before 1 April 2023 filed by amendment on or after 1 April 2023. HMRC's administrative easement for companies misled by its incorrect guidance of 8 September to 17 October 2024 needs both of its conditions met and an application.
Defines a going concern at CTA09/S1112G — latest published accounts prepared on that basis, not in reliance on an entitlement to R&D relief, and the company not in liquidation or administration — with the intra-group trade transfer exception and the effect of the condition under the merged scheme and under ERIS.In a claim:The condition bites differently by scheme. Under the merged scheme it stops the payment; under ERIS it stops the claim.
Connected person takes the meaning given by CTA10/S1122, which bears on expenditure on externally provided workers and contractor payments, on the nominations and assignments restrictions on payments of R&D tax credits, and on the ERIS R&D intensity ratio; transfer pricing rules do not displace the limits on expenditure for subcontracted R&D between connected persons.In a claim:Transfer pricing does not displace the limits on expenditure for subcontracted R&D between connected persons.
Patent Box: overview of the patent box regime: aim of the patent box
Sets out the aim of the Patent Box, an elective 10% corporation tax rate from 1 April 2013 on profits attributable to qualifying patents and certain other qualifying intellectual property rights, as an additional incentive to retain and commercialise patents in the UK.In a claim:Patent Box and R&D relief are not alternatives. They sit in different parts of the computation and neither shuts the other out.
Patent Box: reduced CT rate for profits from patents
Finance Act 2012 introduced Part 8A CTA 2010, under which a qualifying company may elect under CTA10/s357A(1) for a 10% rate delivered as an additional deduction in the corporation tax computation.In a claim:The 10% rate arrives as an additional deduction in the computation rather than as a different rate on the return.
Patent Box: qualifying companies: meaning of ‘qualifying IP right’
Defines a qualifying IP right under CTA10/S357B(4) as a right to which Part 8A applies where the qualifying development test, a significant contribution to the patented invention or a product incorporating it, has been met.In a claim:A right qualifies only where the qualifying development test is met: a significant contribution by the company or another group company to the invention, or to a product incorporating it.
Sets out the four stages normally used to calculate relevant IP profits: streaming income and expenditure, deducting a routine return of 10% of certain costs to give qualifying residual profit, removing a marketing assets return, then applying an R&D fraction.In a claim:R&D feeds the last stage: the fraction applied there ties the beneficial rate to the company's own research expenditure.
Patent Box: relevant IP profits: finance income and excluded income
Finance income is excluded from relevant IP profits under CTA10/s357BG and s357BHB, and other excluded income includes oil extraction income, non-exclusive licence income, RDEC credits and exempt foreign branch income.In a claim:Income arising from RDEC credits is excluded from relevant IP profits, which is the interaction to check where both reliefs are claimed.
Patent Box: relevant IP profits: routine return figure: deductions that are not routine deductions
Lists the expenditure CTA10/S357BJB removes from routine deductions: loan relationship and derivative debits, R&D expenses, research and development and patent allowances, employee share acquisition relief to the extent the employee is engaged in relevant R&D, and creative sector expenditure and credits.In a claim:R&D expenses, including the additional deduction, are not routine deductions, so they do not reduce qualifying residual profit.
Patent Box: supplementary: how to make a Patent Box election
A Patent Box election under CTA10/S357G is made by notice in writing specifying the first accounting period, by the last day on which the return for that period could be amended under FA98/SCH18/PARA15.In a claim:The election is lost with the amendment window: the deadline is the last day the return for the first Patent Box period could be amended.
Patent Box: Tracking and tracing R&D expenditure CTA10/s357BLB
Requires companies to track and trace R&D expenditure, identifying it, tracing it to the development of a particular qualifying IP right and monitoring that link, in order to calculate the R&D fraction for each income sub-stream.In a claim:The expenditure need not have been in an R&D or RDEC claim, but it has to be identified, traced to a particular right and monitored.
The R&D fraction divides in-house and unconnected subcontracted R&D expenditure for each sub-stream by that figure plus connected party subcontracting and acquisition costs, applies a 30% uplift to the numerator, and is capped at 1.In a claim:The 30% uplift means up to 30% of the research can go to a connected company, or to acquisition costs, before the fraction starts to fall.
Patent Box : Terms of the Fraction: R&D Direct expenditure CTA10/s357BLB
D is the company's qualifying expenditure on relevant R&D undertaken in house: staffing costs, software, consumable items, externally provided workers or clinical trial payments, plus data licences and cloud computing services for accounting periods commencing on or after 1 April 2023; Patent Box has not followed the overseas expenditure and contracted out changes taking effect from 1 April 2024.In a claim:Patent Box has not followed the overseas expenditure and contracted out changes taking effect from 1 April 2024, so D is computed on the older basis.
Patent Box: Terms of the R&D fraction : R&D subcontractor expenditure CTA10/s357BLC and BLD
S1 and S2 are the company's qualifying expenditure on relevant R&D subcontracted to unconnected and to connected persons respectively, with connection under CTA10/S1122 applying regardless of residence and no restriction to 65% of subcontractor expenditure such as the SME scheme applies.In a claim:No 65% restriction applies here, unlike the old SME scheme, and connection applies whether the person is resident in the UK or overseas.
Patent Box: terms of the fraction: Acquisition of relevant qualifying IP rights CTA10/s357BLE
A is the company's qualifying expenditure on acquiring relevant qualifying IP rights or exclusive licences, including royalties and fees under an exclusive licence, which are included cumulatively as a proxy for the transferor's R&D input.In a claim:Royalties and annual fees under an exclusive licence are acquisition costs and build up cumulatively, so the fraction falls unless in-house or unconnected research keeps pace.
Sets out the Patent Box calculation as a numbered flowchart running from entry criteria and tracking and tracing through streaming, the routine return, the marketing assets return and the R&D fraction (D+S1)x1.3/(D+S1+A+S2) capped at 1.In a claim:The clearest single view of the order the computation runs in, with excluded income at step 17 and the formula at step 23.
Patent Box: using the Value Fraction in exceptional circumstances CTA10/s357BLH(3)
Allows a company to elect, in exceptional circumstances, to replace the R&D fraction with a higher Value fraction representing a just and reasonable assessment, provided the R&D fraction equals or exceeds 0.325.In a claim:Only available where the R&D fraction already equals or exceeds 0.325, so it cannot rescue a low fraction.
No paragraph matches that. Clear the search, or choose a different chapter.
How to cite a CIRD paragraph in a claim
Give the number and the date you read it.
The manual changes, and HMRC records when in the manual's dated
change log. The paragraph's own page does not carry that date: its banner shows the
whole-manual date, which moves whenever any part of the manual moves.
CIRD81650 and CIRD84250 both said
something materially different before 27 February 2025.
Quote, do not paraphrase.
The additional information form has to stand on its own. HMRC states that it is not
acceptable to refer to documents or information held outside the form, "see R&D report"
for instance, even where HMRC already holds them. Setting out HMRC's own sentence and
marking it as a quotation is our practice for the same reason.
Cite the statute alongside it.
The manual is HMRC's view of the law and not the law, and the First-tier Tribunal has
found that view wrong more than once. A paragraph supports an argument; CTA 2009 Part
13, or CTA 2010 Part 8A for Patent Box, decides it.
Is a CIRD paragraph being quoted at you?
You will speak to a chartered adviser about whether the work meets the statutory test and which scheme applies to your accounting period. There is no obligation.
