Finance Act 2021

Cap on amount of tax credit

2 (1) Section 1058 (amount of tax credit) is amended as follows.

(2) In subsection (1)—

(a) in the words before paragraph (a), after “period is” insert “the lesser of”;

(b) at the end of paragraph (a) insert “and

(aa) the amount given by subsection (1A).”

(3) After subsection (1), insert—

“(1A) The amount given by this subsection is the sum of—

(a) £20,000, and

(b) the amount produced by multiplying by three (“the multiplier”) the company’s relevant expenditure on workers for payment periods ending in the accounting period (see section 1058A).

(1B) If the accounting period is less than 12 months, the amount specified in subsection (1A)(a) is proportionately reduced.

(1C) Subsection (1)(aa) does not apply if section 1058D (exceptions to tax credit cap) applies in relation to the company for the accounting period.”

(4) For subsection (2) substitute—

“(2) The Treasury may by regulations—

(a) replace the percentage for the time being specified in subsection (1)(a) with a different percentage;

(b) replace the amount for the time being specified in subsection (1A)(a) with a different amount;

(c) replace the multiplier for the time being specified in subsection (1A)(b) with a different multiplier.”