The amount, if any, by which R's expenditure under the arrangement exceeds D is to be left out of account in determining R's available qualifying expenditure.

D is the cost to S of providing the service or, if R's expenditure under the arrangement relates to only part of the service, that part.

Subsection (2) is subject to sections 165C and 165D, which provide for D to be calculated differently in certain circumstances.

But if, under any arrangement, a particular service or part of a service is provided by more than one person who is connected with R (so that without this subsection there would be more than one amount for D in relation to that service or part), D is the lowest of those amounts.