The UK government has issued updated guidance to allow pure mathematics to qualify as R&D for tax purposes from 1 April 2023. The Research and Development (Prescribed Activities) Regulations, SI 2023/293, effectively provide a legal definition of ‘research and development’ for tax purposes. That definition sits within ITA 2007 s 1006, but it incorporates the definition in the guidance issued by the secretary of state for business and trade, which is periodically reviewed to ensure it matches current government policy.
The latest version of the guidance – the Guidelines on the Meaning of Research and Development for Tax Purposes published on 7 March 2023 – includes pure mathematics for the first time. Guideline 15B says: ‘Mathematical techniques are frequently used in science. From April 2023 mathematical advances in themselves are treated as science for the purposes of these Guidelines, whether or not they are advances in representing the nature and behaviour of the physical and material universe.’
The regulations have effect for corporation tax for accounting periods beginning after 31 March 2023, and for income tax and capital gains tax from 2023/24 onwards.
The UK government has issued updated guidance to allow pure mathematics to qualify as R&D for tax purposes from 1 April 2023. The Research and Development (Prescribed Activities) Regulations, SI 2023/293, effectively provide a legal definition of ‘research and development’ for tax purposes. That definition sits within ITA 2007 s 1006, but it incorporates the definition in the guidance issued by the secretary of state for business and trade, which is periodically reviewed to ensure it matches current government policy.
The latest version of the guidance – the Guidelines on the Meaning of Research and Development for Tax Purposes published on 7 March 2023 – includes pure mathematics for the first time. Guideline 15B says: ‘Mathematical techniques are frequently used in science. From April 2023 mathematical advances in themselves are treated as science for the purposes of these Guidelines, whether or not they are advances in representing the nature and behaviour of the physical and material universe.’
The regulations have effect for corporation tax for accounting periods beginning after 31 March 2023, and for income tax and capital gains tax from 2023/24 onwards.
