R&D Answers: What is R&D For Tax Credit Purposes?
Date: 23rd January 2012
The Big Question – What is Research and Development For Tax Relief Purposes?
This is the big question which we cannot cover fully here. There is access to all the qualification guidelines on the HMRC web site. The conditions to be satisfied are covered in a document which can be found on the site, called CIRD81900 – R&D tax relief: conditions to be satisfied: DTI guidelines (2004).
If you have time to read CIRD81900, and it will take a while and if you follow all the links you will see it is a great piece of work and can help clarify the question What is R&D for tax relief purposes? If your time is limited and you want to discuss a specific case, please give us a call.
What the pages of detail on CIRD81900 boils down to is that your Research and Development Tax Credit justification needs to explain in plain English:
- In what way your project or projects represent scientific or technological advancement.
- The nature of the scientific or technological uncertainties to be resolved.
- How and when you resolved them.
You also need to provide a description of the technical content of projects and explain in what way your people were qualified to do the R&D.
However don’t be blinded by science many more projects meet the criteria than you may realise especially information communication technology projects.