Part 2Trading income
Chapter 5Trade profits: rules allowing deductions
Scientific research
88Payments to research associations, universities etc.
1
If a person carrying on a trade—
F1a
pays any sum to an Association in the case of which exemption may be claimed under section 508 of ICTA and which has as its object the undertaking of research and development which may lead to or facilitate an extension of the class of trade to which the trade carried on by the person belongs, or
b
pays any sum to be used for scientific research related to that class of trade to an approved university, college research institute or other similar institution,
a deduction is allowed for the sum in calculating the profits of the trade.
2
The deduction is allowed for the period of account in which the payment is made.
3
“Scientific research” means any activities in the fields of natural or applied science for the extension of knowledge.
4
For the purposes of this section—
a
F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
a university, college research institute or other similar institution,
is approved if it is for the time being approved for the purposes of this section by the Secretary of State.
5
The F2reference in subsection (1)(b) to scientific research related to a class of trade include—
a
scientific research which may lead to or facilitate an extension of trades of the class, and
b
scientific research of a medical nature which has a special relation to the welfare of workers employed in trades of the class.
6
If a question arises as to—
a
whether, or
b
F4to what extent,
any activities constitute or constituted scientific research, the Inland Revenue must refer the question for decision to the Secretary of State, whose decision is final.
7
The same expenses may not be brought into account under this section in relation to more than one trade.
8
This section does not apply to professions or vocations.