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HMRC internal manual

Corporate Intangibles Research and Development Manual

R&D tax relief: conditions to be satisfied: minimum expenditure

CTA09/Ss 1050, 1064, 1069, 1075, 1097

Relief is not due unless a company spends more than £10,000 on qualifying R&D expenditure in a 12-month accounting period.

The £10,000 is adjusted proportionately if the accounting period is not 12 months long. For example, if the accounting period is 10 months long the limit is £8,334 = £10,000 x 10 / 12.

For accounting periods beginning before 27 September 2003 (for SMEs) and before 9 April 2003 (for large entities) the minimum expenditure required in a 12-month accounting period was £25,000. If the accounting period straddled the start date for the scheme under which a claim has been made, it is necessary to compare the expenditure after the start date to a minimum rate of £25,000 per year.

Where an SME claims some expenditure under the SME scheme and other expenditure under the large company scheme (CIRD88500) the figures are aggregated for the purpose of establishing whether the minimum expenditure has been achieved.

The limit was removed for accounting periods ending on or after 1 April 2012