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HMRC internal manual

Corporate Intangibles Research and Development Manual

Patent Box : New Regime : Terms of the Fraction: R&D Direct expenditure CTA10/s357BLB

           S357BLB CTA10


D is the company’s qualifying expenditure on relevant R&D undertaken in house which means the expenditure incurred by the company during the relevant period and meeting conditions A and B below:


Condition A –: it is incurred on staffing costs, software or consumable items, externally provided workers or relevant payments to the subjects of clinical trials. Expenditure within Condition A refers directly to expenditure treated as R&D in accordance with generally accepted accounting practice (GAAP) and brought into the company’s accounts. The company does not have to have made an R&D tax credit claim. This is because the company may, for various reasons, not actually qualify for R&D tax credits (although where they do, the application of similar definitions is intended to make record keeping easier). Companies should ensure that their accounting systems are able to capture this data going forward.


Condition B –:it is attributable to relevant R&D (as defined in S1138 CTA 2010 and CIRD274200) undertaken by the company itself

Links to definitions of expenditure included within these categories are below: