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R&D Archive

New guidelines on the meaning of R&D for tax purposes

The Secretary of State for Trade & Industry published the new guidelines on the meaning of research and development for tax purposes on 5 March 2004. The new guidelines were subject to extensive consultation with business and finance professionals and are intended to provide companies with a simplified and clearer definition of R&D for tax purposes. The DTI and HM Revenue & Customs issued a joint consultation document on the subject in July 2003. The revised guidelines represent an important step towards giving UK companies greater confidence to invest in creating high value-added products and services.

The previous guidelines on the meaning of research and development for tax purposes issued in July 2000 continued to be the UK's definition of R&D for tax purposes until 31 March 2004, and the new guidelines came into effect in April 2004. A note setting out the Improvements To Research And Development Tax Credits associated with Budget 2004 was issued by the HM Revenue & Customs confirming that companies could use the new Guidelines as an aid to interpretation of the previous guidelines.

Historic Information on R&D tax credits

A comprehensive list of historic documents showing how R&D tax credits have developed can be found on the HM Revenue & Customs Website.