CIRD89705 – What has changed in HMRC’s RDEC guidance?

HMRC has refreshed CIRD89705, the section of the R&D manual that explains how the R&D Expenditure Credit (RDEC) works. The changes aren’t dramatic, but they do reflect how the scheme has evolved over the last decade and how HMRC now expects companies to prepare and submit their claims.

This update primarily focuses on modernising the guidance rather than rewriting the rules. But because admin is now such a big part of R&D compliance, the tweaks matter.

A quick recap of RDEC

RDEC was introduced in 2013 as a standalone credit for large companies, replacing the old super-deduction scheme that eventually disappeared in 2016. RDEC doesn’t change what qualifies as R&D, and it doesn’t change which costs can be claimed. It only changes how the relief is delivered.

For companies that owe Corporation Tax, the credit reduces their liability. For those without a liability, it can result in a cash payment or an offset against other taxes or duties. This hasn’t changed in the updated guidance.

The new version of CIRD89705 removes the old transitional background about the coexistence of RDEC and the large company scheme, which is no longer relevant. It focuses entirely on RDEC as the established mechanism.

SMEs and RDEC

The relationship between SMEs and RDEC is unchanged. SMEs still use their own scheme, but they can claim RDEC where SME relief isn’t available, for example:

• subsidised projects
• work subcontracted to them by a large company or other SME
• certain grant-funded activities

SMEs can still get a payable credit under RDEC, but it’s subject to the usual restrictions and offsets.

Core features that haven’t changed

Most of the technical foundations remain exactly where they were:

• Large companies can’t normally claim for subcontracted R&D.
• Payments to independent research bodies may qualify in certain conditions.
• Subsidies still don’t reduce qualifying expenditure.
• HMRC can claw back relief if refunded expenditure is later received.

All of this is carried across from the old version with minimal adjustment.

What are the changes to CIRD89705?

This is where the updated guidance really shifts.

Mandatory digital submission:

All R&D claims now need to be submitted digitally, including amended claims. HMRC no longer accepts paper or informal submissions.

Claim Notification requirement:

For accounting periods starting on or after 1 April 2023, some companies must submit a Claim Notification form before their R&D claim will be considered valid. HMRC is using this as an early signal that a company intends to claim.

Additional Information form:

For claims made on or after 8 August 2023, the Additional Information form is compulsory. HMRC will reject claims that are submitted without it. This form is now central to the compliance framework, and it forces claimants to provide structured technical and financial detail.

Amended return rules:

If a company wants to amend a claim, the amendment must include:

• a full CT600
• a Corporation Tax computation

Submitting the amendment without these attachments does not count as making a valid claim until they are supplied. Claims made outside the Corporation Tax Online Service must email the documents instead.

These admin-heavy rules reflect HMRC’s move towards stricter, more standardised claims. They also explain why many advisers are now spending more time on compliance management than ever before.

Familiar points that still stand

The new guidance still confirms:

• Companies can’t claim SME relief and RDEC on the same expenditure.
• SMEs can use RDEC where their costs are excluded from SME rules.
• Pre-April 2013 expenditure held on the balance sheet must be claimed under the old large company scheme.

These haven’t changed; they’re simply reaffirmed.

The updated manual also keeps the worked examples at CIRD89900, which remain useful for understanding how the credit flows through the seven-step calculation.

Final thoughts

The new version of CIRD89705 is less about changing the rules and more about reflecting how the RDEC scheme has stabilised over the past decade. The technical foundations remain the same, but the administrative expectations have shifted significantly.

The most important updates relate to the claims process. Digital filing, the Claim Notification requirement, and the Additional Information form now make up a mandatory part of every R&D claim. Companies should review these changes early to avoid delays or invalid claims.

Read the full guidance: CIRD89705 – R&D Tax reliefs: R&D expenditure credit (RDEC) Scheme: overview – HMRC internal manual – GOV.UK

Please get in touch with our TBAT team today if you require any support surrounding HMRC’s updated RDEC scheme.