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Claiming R&D Expenditure Credits in Creative Industries Projects: What Are the Rules?
Many modern innovation projects sit at the intersection of technology and creativity — particularly in software, gaming, media, immersive tech and design-led industries. These projects often raise a familiar question: where does qualifying R&D end and where does creative activity begin for tax credits?
HMRC’s recent update to CIRD81300 directly addresses this challenge by adding new illustrative examples to show how interdisciplinary projects — including those involving artistic and creative input — may meet the existing statutory tests for R&D tax relief under the UK RDEC (Research and Development Expenditure Credit) scheme.
This is not a change in legislation. It is a clarification of how the rules are meant to work in practice.
It includes two illustrative examples:
Example 1: Virtual Costume Simulation
Example 2: Real-Time Immersive Racing Experience
Why HMRC Added These Examples
HMRC has acknowledged that interdisciplinary and creative projects have been an area of misinterpretation and borderline R&D claims. The new examples are designed to:
Improve transparency for claimants and agents
Support consistency in compliance decisions
Provide greater certainty for businesses working across technical and creative disciplines
RDEC vs Creative Industry Tax Relief: No Double Counting
A key takeaway from the updated guidance is that creative or artistic activity does not automatically prevent R&D qualification.
On the contrary, an important practical point for claimants is that where qualifying R&D activity takes place within a creative industry project, the associated R&D cost must be claimed under RDEC.
It cannot be claimed under a Creative Industry Tax Relief claim although other non-R&D cost may be claimable as part of a creative industry tax relief or credit.
This makes accurate scoping critical for businesses operating in sectors such as video games, film, TV or digital media, where a single project may contain both:
RDEC-qualifying technological R&D, and
Separately qualifying creative expenditure under a creative industries relief.
What makes something R&D?
What matters to whether something qualifies as R&D is the underlying scientific or technological challenge regardless of the industry or sector.
The examples in revised CIRD81300 help clarify when creative input:
Supports the resolution of genuine technological uncertainty, and therefore contributes to qualifying R&D; versus
Is focused on aesthetic, stylistic or narrative outcomes, which remain outside the scope of R&D tax relief — even if the work is innovative or commercially valuable.
Practical Takeaway
HMRC’s expanded use of examples reinforces the need to:
Identify where the technological uncertainty sits within complex projects
Clearly separate R&D activity from creative and routine work
Align claim narratives closely with HMRC’s requirements for qualification
The message is clear: interdisciplinary projects are not excluded from R&D relief — but claims must be precise, well-evidenced and correctly routed through the right scheme.
If you have questions or need some R&D claim advice get in touch
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