C1Part 3Trading income
Chapter 5Trade profits: rules allowing deductions
Scientific research
87Expenses of research and development
1
If a company carrying on a trade incurs expenses of a revenue nature on research and development—
a
related to the trade, and
b
directly undertaken by or on behalf of the company,
a deduction is allowed for the expenses in calculating the profits of the trade.
2
For this purpose expenses incurred on research and development—
a
do not include expenses incurred in the acquisition of rights in, or arising out of, research and development, but
b
subject to that, include all expenses incurred in carrying out, or providing facilities for carrying out, research and development.
3
The reference in this section to research and development related to a trade includes—
a
research and development which may lead to or facilitate an extension of the trade, and
b
research and development of a medical nature which has a special relation to the welfare of workers employed in the trade.
4
The same expenses may not be brought into account under this section in relation to more than one trade.
5
In this section “research and development” has the meaning given by F1section 1138 of CTA 2010 and includes oil and gas exploration and appraisal.
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)