Definition
The BIS Guidelines are the statutory guidelines issued under section 1006 of the Income Tax Act 2007, originally published in 2004 by the Department for Business, Innovation and Skills and updated in 2023 by the successor department. They define research and development for tax purposes by reference to a project seeking an advance in science or technology through the resolution of scientific or technological uncertainty. The guidelines are the primary test HMRC applies when assessing whether an activity qualifies for R&D tax relief.
How HMRC defines it
HMRC incorporates the BIS Guidelines directly into its interpretation at CIRD81300 and cross-references them throughout the Corporate Intangibles Research and Development manual. The 2023 update, titled Guidelines on the meaning of research and development for tax purposes, clarifies the treatment of pure mathematics, data analysis, and software development, and restates the core advance-and-uncertainty test.
Practical example
A robotics firm developing a new control algorithm tests the activity against the BIS Guidelines. The project must seek an advance in the overall knowledge or capability in a field of science or technology, not simply within the company, and must face uncertainty that a competent professional cannot readily resolve. If both conditions are met, the activity falls within the tax definition of R&D.