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HMRC internal manual

Corporate Intangibles Research and Development Manual

Core computational rules: deductible debits: relief for capitalised expenditure on an intangible asset: fixed rate relief: computation


The starting point for the calculation of fixed rate deductions is the tax cost of the asset (see CIRD12720) including an asset for which an election has been made (see CIRD12905).

The fixed rate deduction for an accounting period is then simply the lesser of:

  • 4% or 6.5% of the tax cost (reduced proportionately where the accounting period is less than 12 months)
  • the tax written down value of the asset at the beginning of the period (that is its tax cost reduced by the total of previous fixed rate deductions)

See CIRD12920 for the computation of deductible debits following the part-realisation of an asset.