SCHEDULES
SCHEDULE 2Transitionals and savings
Part 15Research and development
Staffing costs
119
1
In its application to expenditure incurred—
a
before 1 April 2004, and
b
in an accounting period ending on or after 6 April 2003,
section 1123 has effect with the following modification.
2
For subsections (2) and (3) substitute—
2
This subsection applies to earnings paid by the company to directors or employees of the company.
For this purpose “earnings” means earnings or amounts treated as earnings which constitute employment income (see section 7(2)(a) or (b) of ITEPA 2003).
120
In its application to expenditure incurred before 1 August 2008, section 1123 has effect with the omission of subsections (5) and (6).
121
1
In relation to expenditure incurred before 27 September 2003, section 1124 applies, for the purposes of Chapters 2 and 7 of Part 13, with the modification in sub-paragraph (3).
2
In relation to expenditure incurred before 9 April 2003, section 1124 applies, for the purposes of Chapters 3 to 5 of Part 13, with the modification in sub-paragraph (3).
3
For subsections (3) and (4) substitute—
3
In the case of a director (“D”) or employee (“E”) partly engaged directly and actively in relevant research and development the following rules apply—
a
if the time D or E spends so engaged is less than 20% of D's or E's total working time, none of the staffing costs relating to D or E is treated as attributable to relevant research and development,
b
if the time D or E spends so engaged is more than 80% of D's or E's total working time, the whole of the staffing costs relating to D or E is treated as attributable to relevant research and development,
c
in any other case, an appropriate proportion of the staffing costs relating to D or E is treated as attributable to relevant research and development.