28 Nov 2023

What defines guidelines for R&D tax purposes?

Ian Davie
Senior Consultant

Guidelines Concept with Word on Folder.

Within R&D tax credit frameworks, there exist varying degrees of guidance, each with distinct purposes.

Firstly, there’s the ‘Meaning of Research & Development for Tax Purposes: guidelines’ which goes beyond mere suggestions. It’s the legal foundation embedded in Section 1006 of the Income Tax Act 2007. These guidelines constitute the backbone of R&D relief claims, transcending the typical notion of guidance.

Then, there’s the CIRD Manual (Corporate Intangibles Research and Development), which offers an extensive overview of R&D tax reliefs. However, it’s positioned as guidance though is the internal manual on how HMRC is supposed to ork, particularly referencing the relevant detailed parts of the aforementioned GUIDANCE/LAW. Nevertheless, HMRC seems to selectively follow these guidelines, especially concerning aspects like determining R&D project facts when questioning competent professionals.

In October 2023, HMRC released additional guidance in the form of ‘Guidelines for Compliance’ (GfC). Explicitly labelled as guidelines, they also present themselves as Promotional Material. Targeted at tax agents and advisors, these documents cover diverse topics, including Tax, Research & Development for tax purposes, VAT apportionment, and PAYE settlement agreement calculations. (Link: https://lnkd.in/ez6p79fy)

Why the need for more guidelines? The R&D GfC are intended to expand on HMRC’s view on the guidelines on the meaning of R&D for tax purposes (that’s the initial guidelines above). Essentially, these GfC guidelines aim to aid in identifying common errors in claims—like determining the commencement and cessation of R&D, its nature, and who qualifies as competent. Should any Compliance Checks or inquiries contradict ANY of these guidelines or their interpretations, it could lead to some interesting scenarios.

It is hoped that this helps all, HMRC, claimant companies, and tax advisors navigate the complexities of making an R&D claim.

If you would like to discuss any of the above, or would simply like to speak to TBAT Innovation regarding your business, book an appointment today.

Get in touch

How can we help?(Required)
Send Enquiry

Related Articles

01 Oct 2025

R&D Tax Relief: What Are the Real Risks Behind the Reward?

Claiming R&D tax relief is a valuable way to recover costs from innovation projects, but it’s not always straightforward. From misunderstanding HMRC’s definition of R&D to weak record-keeping and inaccurate claims, there are challenges that can turn a straightforward application into a drawn-out enquiry. In this article, we explore the most common risks businesses face when claiming R&D tax and share practical steps to strengthen your claim.

R&D Tax Credits
Bulb
24 Sep 2025

R&D Tax Relief on the Costs of Acquiring Licenses for Third-Party Technology

Third-party technology, including software and license fees, is often overlooked when businesses prepare R&D tax relief claims, yet these costs can be eligible if directly linked to innovation activities. This article breaks down how companies can identify and justify these expenses in line with HMRC guidance.

R&D Tax Credits
Bulb

An independent consultancy, highly skilled and experienced

Assists organisations in accessing research and development grant funding across a range of UK and EU schemes and industry sectors.

Get In Touch