Corporation Tax Act 2009 (c. 4)

Part 13 U.K. Additional relief for expenditure on research and development

Chapter 7 U.K. [F1 Relief for large companies: vaccine research etc]

Textual Amendments

F1 Pt. 13 Ch. 7 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 30

Reliefs U.K.

1087 Deduction in calculating profits of trade U.K.

(1) A company is entitled to corporation tax relief for an accounting period if it meets conditions AF2 ... [F3 , C and D].

(2) Condition A is that the company has incurred expenditure which is qualifying Chapter 7 expenditure for the period.

F4 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Condition C is that the company is carrying on a trade in the period.

[F5 (4A) Condition D is that the company is a large company throughout the period.]

(5) For the company to obtain the relief it must make a claim.

(6) The relief is a deduction in calculating the profits of the trade for the period.

[F6 (7) For the amount of the deduction see section 1091.]

(8) This section is subject to section 1113 (cap on total R&D aid in relation to a particular research and development project).

(9) See also—

(a) section 1088 for the declaration that a F7 ... company is required to make in a claim under this section,

F8 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) section 1098 for the meaning of “qualifying Chapter 7 expenditure”, and

(d) [F9 section 1100] for the meaning of qualifying Chapter 7 expenditure “for” an accounting period.

Textual Amendments

F2 Word in s. 1087(1) omitted (with effect in accordance with Sch. 3 para. 39 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 7(3)(a)

F3 Words in s. 1087(1) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(2)

F4 S. 1087(3) omitted (with effect in accordance with Sch. 3 para. 39 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 7(3)(b)

F5 S. 1087(4A) inserted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(3)

F6 S. 1087(7) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(4)

F7 Word in s. 1087(9)(a) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(a)

F8 S. 1087(9)(b) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(b)

F9 Words in s. 1087(9)(d) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(c)

1088 [F10 Declaration about effect of relief] U.K.

(1) This section applies if a F11 ... company claims relief under section 1087.

(2) The claim must include a declaration that the availability of the relief claimed has resulted in an increase in—

(a) the amount, scope or speed of the research and development undertaken by the company, or

(b) the company's expenditure on research and development.

Textual Amendments

F10 S. 1088 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 23(2)

F11 Word in s. 1088(1) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 23(1)

F12 1089 SMEs: amount of deduction U.K.

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Textual Amendments

F12 S. 1089 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 24

F13 1090 Modification of section 1089 for larger SMEs U.K.

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Textual Amendments

F13 S. 1090 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 24

1091 [F14 Amount of deduction] U.K.

(1) This section applies if—

(a) a company makes a claim under section 1087 for relief to which it is entitled for an accounting period, F15 ...

F15 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) The amount of the deduction under that section is the sum of—

(a) amount A, and

(b) amount B.

(3) Amount A is 40% of so much of the company's qualifying Chapter 7 expenditure for the period as is allowable as a deduction in calculating for corporation tax purposes the profits for the period of a trade carried on by the company.

(4) Amount B is 140% of so much of the company's qualifying Chapter 7 expenditure for the period that is not so allowable.

(5) The deduction is in addition to any other deduction in respect of the expenditure.

(6) See sections 1098 and 1100 for the meaning of “qualifying Chapter 7 expenditure” and provision about when such expenditure is “for” an accounting period.

Textual Amendments

F14 S. 1091 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 25(2)

F15 S. 1091(1)(b) and the word immediately preceding it omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 25(1)

F16 1092 SMEs: deemed trading loss for pre-trading expenditure U.K.

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Textual Amendments

F16 Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26

F16 1093 Modification of section 1092 for larger SMEs U.K.

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Textual Amendments

F16 Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26

F16 1094 Relief only available to SME where company is going concern U.K.

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Textual Amendments

F16 Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26