Part 13 U.K.F1 ... expenditure on research and development

Textual Amendments

F1 Words in Pt. 13 heading omitted (with effect in relation to accounting periods beginning on or after 1.4.2024) by virtue of Finance Act 2024 (c. 3), Sch. 1 paras. 3, 16 (with Sch. 1 para. 18); S.I. 2024/286, reg. 2

Chapter 1 U.K.Introduction

Introductory U.K.

[F2 1039Overview of Part U.K.

(1) This Part provides relief for companies that invest in research and development.

(2) Chapter 1A makes relief available in the form of a credit in respect of expenditure on research and development, which becomes payable in certain circumstances.

(3) Chapter 2 makes alternative relief available, in the form of—

(a) an additional deduction in calculating trading profits, and

(b) a payable credit,

to small or medium-sized enterprises that invest heavily in research and development and do not make associated trading profits.

(4) Chapter 8 limits the reliefs provided by Chapters 1A and 2.

(5) Chapter 9 contains definitions and other supplementary provision.]

Textual Amendments

F2 S. 1039 substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 4(2), 16 (with Sch. 1 para. 18); S.I. 2024/286, reg. 2

[F3 1040No overlapping claims under Chapters 1A and 2 U.K.

A company is not entitled to relief under Chapter 2 in respect of expenditure if it is entitled to, and claims, relief under Chapter 1A in respect of that expenditure.]

Textual Amendments

F3 S. 1040 substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 4(3), 16 (with Sch. 1 para. 18); S.I. 2024/286, reg. 2

[F4 1040ZARestriction on claiming other tax reliefs U.K.

[F5 (A1) For provision prohibiting audiovisual expenditure credit or video game expenditure credit being given where relief is available under this Part, see sections 1179DT and 1179FL.]

(1) For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15 (film tax relief), see section 1195(3A).

(2) For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15A (television tax relief), see section 1216C(4).

(3) For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15B (video games tax relief), see section 1217C(4).

[F6 (4) For provision prohibiting relief being given under this Part and under section 1217H or 1217K (theatrical productions: additional deduction or theatre tax credit), see section 1217JA(2).]

[F7 (5) For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15E (museums and galleries exhibition tax relief), see section 1218ZCG(2).]]

Textual Amendments

F4 S. 1040ZA inserted (with effect in accordance with Sch. 18 para. 23 of the amending Act) by Finance Act 2013 (c. 29), Sch. 18 paras. 10, 22; S.I. 2013/1817, art. 2(2); S.I. 2014/1962, art. 2(3)

F5 S. 1040ZA(A1) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 2 para. 5(3) (with Sch. 2 paras. 16(1), 17-25)

F6 S. 1040ZA(4) inserted (with effect in accordance with Sch. 4 para. 17 of the amending Act) by Finance Act 2014 (c. 26), Sch. 4 paras. 11, 16; S.I. 2014/2228, art. 2

F7 S. 1040ZA(5) inserted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(b) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 12

F8 1040AR&D expenditure credits U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 S. 1040A omitted (with effect in relation to accounting periods beginning on or after 1.4.2024) by virtue of Finance Act 2024 (c. 3), Sch. 1 paras. 4(4), 16 (with Sch. 1 para. 18); S.I. 2024/286, reg. 2

Interpretation U.K.

1041 “Research and development” U.K.

In this Part “research and development” has the meaning given by [F9 section 1138 of CTA 2010].

Textual Amendments

F9 Words in s. 1041 substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 666 (with Sch. 2)

1042 “Relevant research and development” U.K.

(1) In this Part “relevant research and development”, in relation to a company, means research and development—

(a) related to a trade carried on by the company, or

(b) from which it is intended that a trade to be carried on by the company will be derived.

(2) Research and development related to a trade carried on by a company 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.

F10 (3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F10 S. 1042(3) omitted (with effect in accordance with s. 47(15) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 47(4)