Research and development tax relief ― capital expenditure

Produced by Tolley in association with

Corporation Tax

Guidance

This guidance note provides information on the relief available for capital expenditure on research and development (R&D). The Research and development (R&D) relief - overview guidance note provides an overview of R&D reliefs for revenue expenditure. The guidance note Capital vs revenue expenditure provides information on whether expenditure is capital or revenue in nature.

It is important to note that, although R&D tax relief for revenue expenditure is not available to unincorporated businesses or individual hobbyist inventors, only to companies, the RDAs for capital expenditure are available for companies and unincorporated businesses, provided they are carrying on a trade.

See also Simon’s Taxes B3.7 for further details.

Relief for capital expenditure

What is qualifying expenditure for RDAs?

R&D for these purposes is defined as activities that fall to be treated as such in accordance with GAAP and that satisfy the conditions set out in the guidelines issued by the Business, Energy and Industrial Strategy (BEIS) (formerly the Department of Trade and Industry). Essentially, R&D that qualifies for the tax relief for revenue

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