Part 13F12... expenditure on research and development
Chapter 2F13Relief for loss-making, R&D-intensive SMEs
Pt. 13 Ch. 2 heading substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 6(2), 16 (with Sch. 1 para. 18); S.I. 2024/286, reg. 2
Reliefs: further provision
1045AF11Requirement to make a claim notification
1
A company may not make a claim under section 1044(6) (an “additional deduction claim”) after the end of the claim notification period unless—
a
the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,
b
the company makes a claim notification in respect of the additional deduction claim within the claim notification period, or
c
the accounting period in respect of which the additional deduction claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.
2
For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).
F141046Relief only available where company is going concern
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1047Elections under section 1045
1
An election under section 1045 must specify the accounting period in respect of which it is made.
2
The election must be made by notice in writing to an officer of Revenue and Customs.
3
The notice must be given before the end of the period of two years beginning immediately after the end of the accounting period to which the election relates.
1048Treatment of deemed trading loss under section 1045
1
This section applies if under section 1045 a company is treated as making a trading loss in an accounting period F2(“the deemed loss-making period”).
2
3
Subsection (4) applies if—
F8za
the deemed loss-making period begins before 1 April 2017,
a
the company begins, in F5the deemed loss-making period or a later period, to carry on a trade, and
b
the trade is derived from the research and development in relation to which the relief mentioned in subsection (1) was obtained.
4
In that case, so far as—
a
the company has not obtained relief in respect of the trading loss under any other provision, and
b
the loss has not been surrendered under F1Part 5 of CTA 2010 (group relief),
the trading loss is to be treated as if it were a loss of that trade brought forward under F4section 45 of CTA 2010 (relief of trading losses against future trading profits).
F94A
Subsection (4B) applies if—
a
the deemed loss-making period begins on or after 1 April 2017,
b
the company—
i
begins to carry on a trade in the deemed loss-making period which it continues to carry on in the following accounting period, or
ii
begins to carry on a trade in an accounting period after the deemed-loss making period, and
c
the trade is derived from the research and development in relation to which the relief mentioned in subsection (1) was obtained.
4B
In that case, so far as—
a
the company has not obtained relief in respect of the trading loss under any other provision, and
b
the loss has not been surrendered under Part 5 of CTA 2010 (group relief) (surrender of relief to group or consortium members),
the trading loss is to be treated as if it were a loss of that trade brought forward under the relevant provision (see subsection (4C)) to the relevant period (see subsection (4D).
4C
In subsection (4B) “the relevant provision” is—
a
section 45A(4) of CTA 2010 if—
i
the trade is not a ring fence trade within the meaning of Part 8 of CTA 2010 (see section 277 of that Act), and
ii
relief under section 37 of CTA 2010 would not be unavailable by reason of section 44 of that Act for a loss (assuming there was one) made in the trade in the relevant period (see subsection (4D), and
b
section 45B(2) of CTA 2010 if either of the conditions in paragraph (a) is not met.
4D
In subsection (4B) and (4C) “the relevant period” means—
a
in a case where the company began the trade in the deemed loss-making period and continued to carry on the trade in the following accounting period, that following accounting period, and
b
in a case where the company began the trade in an accounting period after the deemed loss-making period, the accounting period in which the company began the trade.
5
F6Subsections (4) and (4B) are subject to section 1062 (restriction on losses carried forward where tax credit claimed).
1049Restriction on consortium relief
1
This section applies if—
a
a company claims relief under section 1044 or elects to obtain relief under section 1045 in respect of an accounting period,
b
at any time during the period the company is owned by a consortium, and
c
at least one of the members of the consortium is a large company.
2
The amount of the relief obtained in respect of the accounting period may not be surrendered by the company to another company, for the purposes of a consortium group relief claim, unless the other company is a small or medium-sized enterprise.
3
A “consortium group relief claim” means a claim to group relief F7based on consortium condition 1, 2 or 3 in sections 132 and 133 of CTA 2010 (group relief available between members of consortia).
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