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Finance Act 2008

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This is the original version (as it was originally enacted).

Research and development relief

1(1)Schedule 20 to FA 2000 (tax relief for expenditure on research and development) is amended as follows.

(2)In paragraph 13 (deduction in computing profits of trade), insert at the end “(subject to paragraph 18A)”.

(3)In paragraph 14(2) (alternative treatment of pre-trading expenditure), insert at the end “(subject to paragraph 18A)”.

(4)In paragraph 15(1) (entitlement to R&D tax credit), insert at the end “(subject to paragraph 18A)”.

(5)In paragraph 18 (payment in respect of R&D tax credit), insert at the end—

(5)This paragraph has effect subject to paragraph 18A.

(6)After that paragraph insert—

R&D tax relief or tax credit only available where company is a going concern

18A(1)A company may only make—

(a)a claim under paragraph 13,

(b)an election under paragraph 14, or

(c)a claim under paragraph 15,

at a time when it is a going concern.

(2)If a company ceases to be a going concern after making a claim for an R&D tax credit under paragraph 15, it shall be treated as if it had not made the claim (and, accordingly, as if there had been no payment of R&D tax credit to carry interest under section 826 of the Taxes Act 1988).

(3)Sub-paragraph (2) does not apply to the extent that the claim relates to an amount that was paid or applied before the company ceased to be a going concern.

(4)For the purposes of this paragraph, a company is a going concern if—

(a)its latest published accounts were prepared on a going concern basis, and

(b)nothing in those accounts indicates that they were only prepared on that basis because of an expectation that the company would receive relief or tax credits under this Schedule or Schedule 13 to the Finance Act 2002.

(5)Section 436(2) of the Companies Act 2006 (meaning of “publication” of documents) has effect for the purposes of this paragraph.

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