Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Research and Development Relief (Information Requirements etc.) Regulations 2024.

(2) These Regulations come into force on 2nd October 2024 and have effect in relation to claims made on or after that date.

(3) In these Regulations, “the 2023 Regulations” means the Relief for Research and Development (Content of Claim Notifications, Additional Information Requirements and Miscellaneous Amendments) Regulations 2023(4).

Information requirements for claims

2.—(1) For regulation 3 of the 2023 Regulations substitute—

“Additional information to be provided in relation to R&D claims

3.—(1) This regulation applies in relation to a claim to which Part 9A of Schedule 18 to the Finance Act 1998(5) (procedure for claims for R&D relief) applies.

(2) The claimant company must provide to an officer of Revenue and Customs the information specified in Schedule 2 (subject to any limitation set out in that Schedule).

(3) That requirement applies only in relation to the initial making of the claim (not any amendment).

(4) In Schedule 2—

“the Chapter 2 Regulations” means the Research and Development (Chapter 2 Relief) Regulations 2024(6);

“CTA 2009” means the Corporation Tax Act 2009;

“employer’s PAYE reference” has the meaning given by regulation 2(1) of the Income Tax (Pay As You Earn) Regulations 2003(7);

“in-house expenditure” means expenditure that is attributable to research and development undertaken by the company itself;

“qualifying indirect activities” has the meaning given in the Guidelines on the Meaning of Research and Development for Tax Purposes issued by the Secretary of State for Business and Trade on 7 March 2023(8).”.

(2) For paragraphs 1 and 2 of Schedule 2 to the 2023 Regulations substitute—

“Claimant’s details

1.—(1) The following information in relation to the company—

(a)registered name (or, if the company is not a registered company, formal name);

(b)unique taxpayer reference number;

(c)if the company is registered for VAT, its VAT registration number within the meaning of section 77E of the Value Added Tax Act 1994(9);

(d)employer’s PAYE reference, if available;

(e)main area of business;

(f)whether the company has a registered office in Northern Ireland, and if so—

(i)the postcode for the office;

(ii)the registered number of the company.

(2) If the claim is under Chapter 2 of Part 13 of CTA 2009 and the company has a registered office in Northern Ireland—

(a)whether the company has, at any point during the accounting period to which the claim relates, carried on a trade that involves—

(i)trading in goods, or

(ii)the generation, transmission, distribution, supply, wholesale trading or cross-border exchange of electricity; and

(b)if not, whether the company wishes to rely on regulation 2(3) of the Chapter 2 Regulations.

Responsible officer

2.  The following information in relation to the officer of the company who is responsible for ensuring the accuracy of the information provided under this Schedule—

(a)name;

(b)role in the company;

(c)telephone number;

(d)email address.

Agents and advisers

3.  If an agent or tax adviser is or has been engaged by the company, or has provided services to the company, in any capacity in relation to the claim, the following information in relation to each such agent or adviser—

(a)name (or, if the agent or adviser is a registered company, its registered name);

(b)agent reference number;

(c)business or trading name;

(d)address of principal place of business;

(e)telephone number;

(f)email address;

(g)whether or not the role of the agent or adviser is limited to matters concerning relief for research and development.

Periods of claim

4.  The start date and end date of the accounting period, and the period of account, to which the claim relates.

The relevant R&D

5.—(1) The following information in relation to the research and development to which the claim relates.

(2) The number of projects undertaken.

(3) In relation to each relevant project—

(a)a name by which the project can be referred to;

(b)words identifying the field of science or technology with which the project is concerned;

(c)a description of—

(i)the scientific or technological knowledge that existed when the project began and that the project aimed to improve upon;

(ii)the advance in scientific or technological knowledge that the project aimed to achieve;

(iii)the scientific or technological uncertainties that the project faced;

(iv)how the project sought to overcome those uncertainties.

(4) For the purposes of sub-paragraph (3)—

(a)if the number given under sub-paragraph (2) is 3 or less, each of the projects is a relevant project;

(b)if the number is more than 3, subject to paragraph (c)—

(i)the company must select 3 or more projects to treat as relevant projects, and

(ii)those projects must together account for at least half of the qualifying expenditure in respect of which the claim is made;

(c)if—

(i)the number is more than 10, and

(ii)complying with paragraph (b) would lead to more than 10 projects being treated as relevant projects,

the 10 projects accounting for the 10 highest shares of the qualifying expenditure in respect of which the claim is made (but only those projects) are relevant projects.

(5) If the claim relates to an accounting period beginning on or after 1st April 2024, whether the research and development was undertaken—

(a)entirely in the United Kingdom,

(b)entirely outside the United Kingdom, or

(c)partly in and partly outside the United Kingdom.

(6) If the claim relates to an accounting period beginning before 1st April 2024, whether or not the research and development was undertaken entirely in the United Kingdom.

Qualifying expenditure: claims under the new schemes

6.—(1) If the claim relates to an accounting period beginning on or after 1st April 2024, the following information.

(2) The amount of qualifying expenditure in respect of which the claim is made.

(3) In this paragraph, “qualifying expenditure”—

(a)in relation to a claim under Chapter 1A of Part 13 of CTA 2009(10), means qualifying Chapter 1A expenditure(11);

(b)in relation to a claim under Chapter 2 of that Part, means qualifying Chapter 2 expenditure(12).

(4) The amount of the qualifying expenditure that falls within each of the following categories—

(a)in-house expenditure incurred on staffing costs(13);

(b)in-house expenditure incurred on software;

(c)in-house expenditure incurred on data licences;

(d)in-house expenditure incurred on cloud computing;

(e)in-house expenditure incurred on consumable items(14);

(f)in-house expenditure that is qualifying expenditure on externally provided workers(15);

(g)in-house expenditure incurred on relevant payments to the subjects of a clinical trial(16);

(h)expenditure incurred in making the qualifying element of a contractor payment(17).

(5) If an amount more than nil is given for the category in sub-paragraph (4)(f)—

(a)the number of externally provided workers whose earnings form part of the qualifying expenditure concerned;

(b)in relation to each such worker, the employer’s PAYE reference, if available;

(c)whether any of the qualifying expenditure concerned is attributable to research and development undertaken outside the United Kingdom, and if so—

(i)how much;

(ii)in respect of each worker whose earnings form part of the expenditure, whether the company or the staff controller(18) is required to account both for income tax under PAYE regulations and for Class 1 national insurance contributions in respect of any part of those earnings;

(d)if—

(i)a negative answer is given under paragraph (c)(ii) of this sub-paragraph in respect of any worker, and

(ii)no positive answer was given under paragraph (a) or (b) of paragraph 1(2) of this Schedule,

the company’s reasons for considering that section 1138A of CTA 2009(19) applies.

(6) No more than 10 references need to be given under sub-paragraph (5)(b); but in selecting which references to give from more than 10, the company must not omit the reference of an employer that employed more of the workers referred to in sub-paragraph (5)(a) than an employer whose reference is given.

(7) If an amount more than nil is given for the category in sub-paragraph (4)(h)—

(a)the identity of each relevant contractor;

(b)the employer’s PAYE reference for each relevant contractor, if available;

(c)in relation to each relevant contractor, the amount of the qualifying expenditure concerned that consists of contractor payments(20) to that contractor;

(d)whether any of the qualifying expenditure concerned is attributable to research and development undertaken outside the United Kingdom, and if so how much;

(e)if—

(i)a positive answer is given under paragraph (d) of this sub-paragraph, and

(ii)no positive answer was given under paragraph (a) or (b) of paragraph 1(2) of this Schedule,

the company’s reasons for considering that section 1138A of CTA 2009 applies.

(8) For the purposes of sub-paragraph (7)—

(a)a “relevant contractor” is a company that received a contractor payment that is comprised in the qualifying expenditure notified under sub-paragraph (4)(h);

(b)if there are 10 or fewer such companies, each is a relevant contractor;

(c)if there are more than 10 such companies, only the 10 that received payments accounting for the 10 highest shares of the qualifying expenditure notified under sub-paragraph (4)(h) (taking together separate payments made to a single company) are relevant contractors.

(9) The amount of the qualifying expenditure that is attributable to qualifying indirect activities.

Qualifying expenditure: claims under the old schemes

7.—(1) If the claim relates to an accounting period beginning before 1st April 2024, the following information.

(2) The amount of qualifying R&D expenditure in respect of which the claim is made.

(3) In this paragraph, “qualifying expenditure”—

(a)in relation to a claim under Chapter 6A of Part 3 of CTA 2009(21), means qualifying R&D expenditure(22);

(b)in relation to a claim under Chapter 2 of Part 13 of CTA 2009, means qualifying Chapter 2 expenditure(23).

(4) The amount of the qualifying expenditure that falls within each of the following categories—

(a)in-house expenditure incurred on staffing costs;

(b)in-house expenditure incurred on software;

(c)in-house expenditure incurred on data licences;

(d)in-house expenditure incurred on cloud computing;

(e)in-house expenditure incurred on consumable items;

(f)in-house expenditure that is qualifying expenditure on externally provided workers;

(g)in-house expenditure incurred on relevant payments to the subjects of a clinical trial;

(h)qualifying expenditure on contracted out research and development(24);

(i)in the case of a claim under Chapter 6A of Part 3 of CTA 2009, subsidised qualifying expenditure on contracted out research and development(25);

(j)also in such a case, qualifying expenditure on contributions to independent research and development(26).

(5) The amount of the qualifying expenditure that is attributable to qualifying indirect activities.

R&D intensity threshold

8.—(1) If the claim—

(a)is made under Chapter 2 of Part 13 of CTA 2009, and

(b)relies on the company having met the R&D intensity condition(27) in the accounting period to which the claim relates,

the following information.

(2) The total amount forming part of the company’s total relevant expenditure for the period by virtue of paragraphs (a) and (b) of section 1045ZA(5) of CTA 2009.

(3) The amount forming part of the company’s total relevant expenditure for the period by virtue of paragraph (c) of that subsection.

(4) The company’s relevant R&D expenditure for the period(28).

(5) In relation to each company (if any) that the claimant company is aware of having been connected with(29) on any day within the period—

(a)registered name (or, in the case of a company other than a registered company, formal name);

(b)country of registration (or, in the case of a company other than a registered company, the country in which it is based);

(c)registered number, in the case of a company registered in the United Kingdom;

(d)the total amount forming part of the company’s total relevant expenditure for the period by virtue of paragraphs (a) and (b) of section 1045ZA(5) of CTA 2009;

(e)the amount forming part of the company’s total relevant expenditure for the period by virtue of paragraph (c) of that subsection;

(f)the company’s relevant R&D expenditure for the period.

Companies creating or managing intellectual property

9.  Whether the claim relies on the application of section 1058D or 1112E of CTA 2009(30) to the company, and if so, the company’s reasons for considering that the section in question applies.

Information relating to limit in Northern Ireland

10.—(1) If a positive answer was given under sub-paragraph (a) or (b) of paragraph 1(2)—

(a)the aggregate Chapter 2 net benefit obtained by the company in the 2 most recent accounting periods before that to which the claim relates, and

(b)a statement to the effect that the obtaining of relief by the company in the amount claimed would not produce a breach of the limit that applies by virtue of regulation 4 of the Chapter 2 Regulations.

(2) For the purposes of sub-paragraph (1)(a), the Chapter 2 net benefit obtained by a company in an accounting period is the amount produced by applying the formula in regulation 4(4) of the Chapter 2 Regulations in relation to that period.”.

Minor amendment in relation to claim notifications

3.  In paragraph 2 of Schedule 1 to the 2023 Regulations, in the second column of the entry for “the company”, in paragraph (a), after “name” insert “(or, if the company is not a registered company, formal name)”.

Electronic delivery of notifications under the Chapter 2 Regulations

4.—(1) The Income and Corporation Taxes (Electronic Communications) Regulations 2003(31) are amended as follows.

(2) In regulation 2(1)(a) (information within scope of the regulations)—

(a)after paragraph (ix), omit “or”;

(b)after paragraph (x), for “; and” substitute “, or

“(xi)regulation 2(3)(b) of the Research and Development (Chapter 2 Relief) Regulations 2024; and”.

(3) In regulation 3—

(a)in paragraph (2A) (mandatory use of electronic communications for certain information), for the words from “a company” to “1998,” substitute “—

“(a)a company tax return,

(b)associated R&D information, or

(c)information provided under paragraph 83WA of Schedule 18 to the Finance Act 1998(32);”;

(b)after paragraph (2A) insert—

“(2AA) In paragraph (2A), “associated R&D information” means—

(a)a claim notification under section 1142A of the Corporation Tax Act 2009,

(b)additional information provided under paragraph 83EA of Schedule 18 to the Finance Act 1998, or

(c)a notification under regulation 2(3)(b) of the Research and Development (Chapter 2 Relief) Regulations 2024.”.

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Relief for Research and Development (Content of Claim Notifications, Additional Information Requirements and Miscellaneous Amendments) Regulations 2023 to restate the information that has to be provided by a company claiming relief from corporation tax in respect of expenditure on research and development (“R&D”). The changes they make reflect significant reforms to the R&D regime made by Schedule 1 to the Finance Act 2024. The Regulations also:

• make a small technical amendment of those 2023 Regulations in relation to notifications of R&D claims, and

• amend the Income and Corporation Taxes (Electronic Communications) Regulations 2003 to require notifications under regulation 2(3)(b) of the Research and Development (Chapter 2 Relief) Regulations 2024 (which enable certain companies to opt out of the special rules laid down by those Regulations) to be made electronically.

Schedule 1 to the Finance Act 2024 introduces the new merged R&D scheme, together with additional relief for loss-making, R&D-intensive small and medium-sized enterprises (“SMEs”) through a higher rate of payable tax credit.

A Tax Information and Impact Note (“TIIN”) on the merged R&D scheme and a TIIN on the enhanced support for R&D-intensive SMEs both of which cover this instrument were published on 22nd November 2023 (and updated on 23rd November 2023) alongside the Autumn 2023 Finance Bill and are available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. They remain an accurate summary of the impacts that apply to this instrument.