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HMRC internal manual

Corporate Intangibles Research and Development Manual

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HM Revenue & Customs
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R&D Tax reliefs: R&D expenditure credit (RDEC) scheme: R&D contracted to a SME

Chapter 6A CTA 2009 S104C to E

See CIRD81470 

To qualify under the expenditure credit scheme the R&D must be contracted out to the SME by:

  • a large company, or
  • any person otherwise than in the course of carrying on a chargeable trade. (A chargeable trade is a trade, profession or vocation carried on wholly or partly in the United Kingdom, the profits of which are chargeable to income tax under Chapter 2, of Part 2 of ITTOIA 2005, or chargeable to corporation tax under Chapter 2 of Part 3 of CTA 2009)

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.