Finance Act 2000

Staffing costs E+W+S+N.I.

5 (1) For the purposes of this Schedule the staffing costs of a company are— E+W+S+N.I.

(a) the emoluments paid by the company to directors or employees of the company, including all salaries, wages, perquisites and profits whatsoever other than benefits in kind;

(b) the secondary Class 1 national insurance contributions paid by the company; and

(c) the contributions paid by the company to any pension fund F1 . . . operated for the benefit of directors or employees of the company.

[F2 (1A) In sub-paragraph (1)(c) “pension fund” means any scheme, fund or other arrangements established and maintained (whether in the United Kingdom or elsewhere) for the purpose of providing pensions, retirement annuities, allowances, lump sums, gratuities or other superannuation benefits (with or without subsidiary benefits).

In this sub-paragraph “scheme” includes any deed, agreement or series of agreements.]

(2) The staffing costs of a company attributable to relevant research and development are those paid to, or in respect of, directors or employees directly and actively engaged in such research and development.

(3) In the case of a director or employee partly engaged directly and actively in relevant research and development the following rules apply—

(a) if the time he spends so engaged is less than 20% of his total working time, none of the staffing costs relating to him are treated as attributable to relevant research and development;

(b) if the time he spends so engaged is more than 80% of his total working time, the whole of the staffing costs relating to him are treated as attributable to relevant research and development;

(c) in any other case, an appropriate proportion of the staffing costs relating to him are treated as attributable to relevant research and development.

(4) For the purpose of sub-paragraphs (2) and (3) persons who provide services, such as secretarial or administrative services, in support of activities carried on by others, are not, by virtue of providing those services, to be treated as themselves directly and actively engaged in those activities.

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Amendments (Textual)

F1 Words in Sch. 20 para. 5(1)(c) repealed (24.7.2002 with effect as mentioned in the note under Sch. 40 Pt. 3(5) of the amending Act) by 2002 c. 23, ss. 56, 141, Sch. 15 para. 3(a), Sch. 40 Pt. 3(5) Note

F2 Sch. 20 para. 5(1A) inserted (24.7.2002 with effect as mentioned in s. 56 of the amending Act) by 2002 c. 23, s. 56, Sch. 15 para. 3(b)

Modifications etc. (not altering text)

C1 Sch. 20 para. 5 applied (with modifications) (24.7.2002 with effect as mentioned in Sch. 13 para. 28(1) of the amending Act) by 2002 c. 23, s. 54, Sch. 13 para. 5(3)(b)

Sch. 20 para. 5 applied (24.7.2002 with effect as mentioned in s. 53(1) of the amending Act) by 2002 c. 23, s. 53, Sch. 12 para. 17(b)