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HMRC internal manual

Corporate Intangibles Research and Development Manual

R&D tax reliefs: Research and Development Expenditure Credit scheme: R&D contracted to an SME


To qualify under the Research and Development Expenditure Credit scheme the R&D must be contracted out to the SME by:

  • a large company, or 
  • a person otherwise than in the course of a trade profession or vocation the profits of which are chargeable to tax under Case I or II of Schedule D.

The expenditure must be relevant R&D for the SME (CIRD81400) and be revenue expenditure incurred on either:

Or, work contracted by the SME company to be directly carried out by:

  • a qualifying body (see CIRD82200), or
  • an individual, or
  • a partnership, each member of which is an individual.