Guidelines on the meaning of research and development for tax purposes
Summary
Guidelines issued by the Secretary of State for
Trade and Industry provide a definition of R&D for tax
purposes,
such as R&D tax credits. This page provides a link to these
Guidelines and other related information.
Contents
New
Guidelines apply from 1 April 2004
New
Guidelines published - 5 March 2004
Previous
Guidelines
Useful links
Contact details
The new
Guidelines on the meaning of research and development for tax purposes
(also available in PDF format) published on 5 March 2004 will have effect from 1 April 2004.
This means they apply to company accounting periods ending on or after 1
April 2004. The Inland Revenue have confirmed that companies
may use the new Guidelines as an aid to interpretation of the
previous
Guidelines (also available in PDF
format), in a note setting out Improvements
To Research And Development Tax Credits associated with Budget 2004.
On 5 March 2004 the Secretary of State for Trade
and Industry, Patricia Hewitt, published
new
Guidelines on the meaning of research and development for tax purposes.
These Guidelines, which have been the subject of extensive consultation
with business and finance professionals, are intended to become a
revised, clearer definition of R&D for tax purposes. The revised
definition of R&D is an important step towards giving UK companies
greater confidence to invest in creating high value-added products and
services.
The current
Guidelines on the meaning of research and development for tax purposes
will continue to be the UK's definition of R&D for tax purposes for
the time being, but the new Guidelines will replace them in April. The
next step will be for a Statutory Instrument to be laid in Parliament,
to bring the new Guidelines into effect. Subject to Parliamentary
approval, the revised definition will be in place for the new financial
year, including transitional arrangement for companies whose accounting
period is covered by both regimes.
DTI is already working with Inland Revenue
officials to draw up new, clearer guidance for companies and tax
professionals, based on the new Guidelines, to be published later this
year. We are also working hard to spell out how DTI’s innovation
support interacts with R&D tax credits.
Information
on R&D tax credits and Vaccines tax credit can be found on the
Inland Revenue website. (Please note that DTI is not responsible for the
content of external sites.)
An Inland Revenue note setting
out Improvements
To Research And Development Tax Credits associated with Budget 2004.
Information on
DTI
support for innovation and technology is available from the DTI
website.
How R&D helps companies create value and
profits is illustrated in the annual R&D
Scoreboard and Value
Added Scoreboard.
Back to the DTI
home page.
If you want to ask a question about claiming
R&D tax credits or other tax allowances using the definition of
R&D in these Guidelines, please contact
your local tax inspector.
We are happy to answer any enquiries
about the Guidelines.
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