Finance Act 2021

Section 19

SCHEDULE 4 R&D tax credits for SMEs: Northern Ireland companies

Cap on amount of tax credit

1 In Chapter 9 of Part 8B of CTA 2010 (research and development expenditure), section 357PD (amount of tax credit under section 1054 of CTA 2009) is amended in accordance with paragraphs 2 to 5.

2 For subsection (2) substitute—

“(2) The amount of the R&D tax credit to which the company is entitled for the accounting period is, where the company has a Northern Ireland Chapter 2 surrenderable loss but does not have a mainstream Chapter 2 surrenderable loss, the lesser of—

(a) the amount of the Northern Ireland Chapter 2 surrenderable loss multiplied by the relevant percentage, and

(b) the amount given by section 1058(1A) of CTA 2009.

(2A) Subsection (2)(b) does not apply if section 1058D of CTA 2009 (exceptions to tax credit cap) applies in relation to the company for the accounting period.”

3 For subsection (3) substitute—

“(3) The amount of the R&D tax credit to which the company is entitled for the accounting period is, where the company has a mainstream Chapter 2 surrenderable loss but does not have a Northern Ireland Chapter 2 surrenderable loss, the lesser of—

(a) the amount of the mainstream Chapter 2 surrenderable loss multiplied by the percentage specified in section 1058(1)(a) of CTA 2009, and

(b) the amount given by section 1058(1A) of CTA 2009.

(3A) Subsection (3)(b) does not apply if section 1058D of CTA 2009 (exceptions to tax credit cap) applies in relation to the company for the accounting period.”

4 In subsection (4), for the words from “sum of” to the end, substitute “lesser of—

(a) the sum of—

(i) the amount of the Northern Ireland Chapter 2 surrenderable loss multiplied by the relevant percentage, and

(ii) the amount of the mainstream Chapter 2 surrenderable loss multiplied by the percentage specified in section 1058(1)(a) of CTA 2009, and

(b) the amount given by section 1058(1A) of CTA 2009.”

5 After subsection (4) insert—

“(4A) Subsection (4)(b) does not apply if section 1058D of CTA 2009 (exceptions to tax credit cap) applies in relation to the company for the accounting period.”

Commencement

6 Section 5(4) to (6) of CT(NI)A 2015 (commencement) has effect as if references to Part 8B of CTA 2010 were to that Part as amended by this Schedule.