Policy paper

Research and Development — clarifying the scope of the overseas restriction

This measure is about an amendment to the Research and Development (R&D) tax relief rules for companies with a registered office in Northern Ireland.

• From: HM Revenue & Customs
• Published: 21 July 2025

Documents

Research and Development expenditure credit for Northern Ireland companies — clarification of the overseas restriction

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Details

There are restrictions in both Research and Development (R&D) tax relief schemes for relief on contracted out R&D, and the cost of externally provided workers, for R&D taking place outside the UK. There is an exemption from these restrictions for companies with a registered office in Northern Ireland that claim enhanced R&D intensive support (ERIS) (unless they opt out). This measure makes amendments to the exemption to clarify that it applies to ERIS claimants only.

This means that for R&D expenditure credit (RDEC) claimants, and ERIS claimants who opted out of the Northern Ireland provisions, the overseas restrictions apply in the same way across the UK, including Northern Ireland. This legislation will apply to claims made on or after 30 October 2024.

Published 21 July 2025