CIRD81600 - R&D tax relief: conditions to be satisfied: minimum expenditure

FA00/SCH20/PARA1 (2) & FA02/SCH11/PARA1 (2)

Relief is not due unless a company spends more than £10,000 on qualifying R&D expenditure in a 12-month accounting period.

The £10,000 is adjusted proportionately if the accounting period is not 12 months long. For example, if the accounting period is 10 months long the limit is £8,334 = £10,000 x 10 / 12.

For SMEs this minimum applies for accounting periods beginning on or after 27 September 2003, for large entities this limit applies for accounting periods beginning on or after 9 April 2003.

For accounting periods beginning before these dates the minimum expenditure required in a 12-month accounting period was £25,000. If the accounting period straddled the start date for the scheme under which a claim has been made, it is necessary to compare the expenditure after the start date to a minimum rate of £25,000 per year.

Where an SME claims some expenditure under the SME scheme and other expenditure under the large company scheme ( CIRD88500) the figures are aggregated for the purpose of establishing whether the minimum expenditure has been achieved.