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 79.
The index
The 79 paragraphs our published guidance relies on, cited across 95
of our pages. It is not the whole manual. Every one was fetched from gov.uk and checked
on 14 September 2026.
Showing all 79 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 six months after the end of the period of account — 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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