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Finance Act 2012

Details of the Schedule

2.Paragraph 2 of the Schedule increases the rate of the additional deduction for R&D expenditure provided by section 1044 CTA 2009 from 100 per cent to 125 per cent for SME companies.

3.It also increases the relief for pre-trading expenditure claimed as a deemed trading loss by a corresponding amount and reduces the rate of payable tax credit for a SME to 11 per cent of the surrendered loss.

4.Paragraphs 3 to 8 remove, for both SMEs and large companies, the £10,000 per annum minimum R&D expenditure.

5.Paragraphs 9 to 14 clarify that a company in administration or liquidation is not a going concern for the purposes of SME R&D relief and Vaccine Research Relief.

6.Paragraph 15 removes the restriction, to the level of the company’s PAYE and NIC liabilities, of the amount of tax credit a SME company may claim.

7.Paragraphs 16 to 32 abolish Vaccines Research Relief (VRR) for SMEs.

8.Paragraph 33 extends both the definition of “externally provided worker” in section 1128 and the qualifying expenditure allowable on “externally provided workers” in section 1129 of CTA 2009. It removes the previous restriction where relief could only be claimed  in contractual arrangements involving three parties and applies in both connected party and unconnected situations

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