Research and Development – With Patent Box 3rd Edition

IMPORTANT: Please note that, in light of announcements at the Autumn Statement, and now also in the Budget of 15 March 2023, publication of this edition has been subject to some delay. However, the new edition will reflect all of the changes and will be published either in late April or in the first half of May.

The UK’s special tax rules for R&D expenditure continue to offer valuable tax relief for companies.

This book explains how the scope of the relief is wider than is often imagined, whilst also showing the statutory conditions that must be met for a successful claim. The book also demonstrates how the tax rules have become more generous in recent years.

Contents (in brief)

• Research and development
• • First principles (overview of reliefs)
  • Definition of R&D
  • Can a claim be made?
  • Which scheme – criteria for SME scheme claim
  • Which scheme – criteria for large RDEC claim
  • Which scheme – criteria for SME RDEC claim
  • Calculations (all schemes)
  • Qualifying expenditure (all schemes)
  • Practical steps – making the claim
• Research and development allowances
• • R&D capital allowances
• Patent Box
• • Can a Patent Box claim be made
  • How to approach the Patent Box
  • Old entrant – no new IP
  • New entrant
  • Old entrant – new IP
• Appendices

New for this edition

• Fully updated to reflect changes announced at the Autumn Statement in November 2022 and in the Budget of 15 March 2023.
• Commentary and examples updated for change in rates. Numerous new examples added.
• New examples illustrating the tax definition of R&D.
• New R&D scheme for SMEs from April 2023.
• Proposed inclusion of pure mathematics, artificial intelligence and quantum computing in R&D claims.
• Potential restriction of relief for some subcontracted R&D work performed overseas.
• Case law on subsidised R&D expenditure and on criteria for “an advance in the field of technology”.
• Impact of PAYE and NIC cap on an SME payable tax credit claim.
• Expenditure on data sets and cloud computing.
• Updated HMRC guidance concerning the detail required in a claim for multiple projects.
• Additional guidance on how to submit an R&D claim when the supporting data is not yet currently available.
• Update to the advance assurance procedure for submitting an R&D claim.
• Additional advice in respect of capturing data relevant for an R&D claim.
• Details about structures and building allowances and the plant and machinery super-deduction.
• Making a new Patent Box election following a previous revocation.
• Cost-sharing arrangements and the patent pending period.
• Discussion of meaning of “significantly contributing” and “significant activity”.
• Expanded section listing relevant points to consider when deciding whether to make a Patent Box claim.
• Comprehensive step-by-step examples added re calculation of Patent Box deductions in various circumstances.
• New summary of the key differences between externally provided workers and subcontractors.