CIRD80520 – R&D tax relief: examining a claim: introduction

HMRC has released an updated version of its guidance note CIRD80520, which outlines the process for examining claims under the UK’s Research and Development (R&D) tax relief schemes. While the fundamental purpose of the relief remains the same, namely to encourage business investment in innovation, the revised guidance introduces several important administrative and structural changes that companies and advisers should be aware of. 

The core message of the CIRD80520 guidance is consistent with previous versions. R&D tax relief is recognised as a critical source of support for businesses, particularly small or early-stage companies. Payable tax credits can make a significant difference to cash flow, and HMRC continues to emphasise the need to process these claims efficiently. Where an enquiry has been opened and a payment has not yet been made, HMRC officers are reminded to consider whether a partial payment may be appropriate. 

Key Technical Considerations Remain

The key technical elements of the guidance remain largely unchanged. The document still outlines the risk factors to consider during a claim review, the common errors that may arise, and the types of records HMRC may expect to see. HMRC encourages officers to adopt an open-minded and respectful approach, recognising the effort and expertise behind each R&D project. Officers are expected to ask questions that explore the scientific or technological advance being pursued, the uncertainties involved, and whether the work could be considered routine or was beyond current knowledge in the field. References to the BIS Guidelines and Generally Accepted Accounting Practice (GAAP) remain in place. 

One of the most significant changes is the removal of the previous structure that involved seven specialist R&D units managing claims outside the Large Business Service (LBS). In their place, HMRC now directs compliance activity through its Individuals and Small Business Compliance (ISBC) and Wealthy and Mid-sized Business Compliance (WMBC) teams. This new structure has already been reflected in other HMRC practice notes and represents a move toward a more centralised and standardised national approach. 

The section of the guidance formerly titled Practice in Local Compliance has now been renamed Practice in ISBC and WMBC. The updated wording confirms that trained officers, supported by R&D specialists, will review claims across all qualifying companies within these groups. It also directs users to the companion practice note CIRD80525, which provides further detail on how claims are handled within these teams. 

Advance Assurance for First-Time Claimants

Another important addition to the guidance is the reference to Advance Assurance. This service allows small and medium-sized companies making their first R&D claim to submit details in advance for HMRC review. If HMRC agrees that the activities meet the qualifying criteria, it will guarantee that future claims will be accepted as long as they remain consistent with what was originally submitted. Including this option in the guidance encourages businesses to engage early and minimise the chance of future disputes or delays. 

There has also been a change to the reference point for LBS practice. The guidance now points to CIRD80370 instead of the older CIRD85100, which has now been archived, reflecting a general restructuring of HMRC’s documentation and making it easier for users to locate the most current content. LBS officers are often in regular contact with the large groups they work with, and are familiar with their structures and activities. Due to the complexity and compliance costs involved, R&D projects are typically discussed early on. 

Summary of changes 

The handling of R&D tax credit claims outside the Large Business Service (LBS) has evolved over time. Initially, from 1 November 2006, seven geographically based Specialist Units were established to manage these claims, with companies assigned to a unit based on the postcode of their main R&D activity. This structure was supported by a practice note (CIRD80525) and encouraged early engagement with inspectors to clarify the process and reduce the likelihood of enquiries. Over time, this approach transitioned to a more streamlined model involving designated Individuals and Small Business (ISBC) and Wealthy and Mid-sized Business Compliance (WMBC) teams. These teams, supported by R&D Specialists, now manage compliance more centrally, still guided by the same practice note. In addition, SMEs making their first claim are now offered the option of applying for advance assurance, which provides greater certainty and support early in the process. 

Businesses preparing R&D claims are encouraged to familiarise themselves with the updates and consider engaging with HMRC. 

If you like any help or support understanding the information provided in the CIRD80520 manual, please get in touch with our TBAT team today.

Read the full guidance: CIRD80520 – R&D tax relief: examining a claim: introduction – HMRC internal manual – GOV.UK