Part 13Additional relief for expenditure on research and development
Chapter 3Relief for SMEs: R&D sub-contracted to SME
Relief
1063Additional deduction in calculating profits of trade
1
A company is entitled to corporation tax relief for an accounting period if it meets conditions A, B and C.
2
Condition A is that the company is a small or medium-sized enterprise in the period.
3
Condition B is that the company meets the R&D threshold in the period (see section 1064).
4
Condition C is that the company has qualifying Chapter 3 expenditure which is allowable as a deduction in calculating for corporation tax purposes the profits for the period of a trade carried on by the company.
5
For the company to obtain the relief it must make a claim.
6
The relief is an additional deduction in calculating the profits of the trade for the period.
7
The amount of the additional deduction is 30% of the qualifying Chapter 3 expenditure.
8
For the meaning of “qualifying Chapter 3 expenditure” see section 1065.
9
See also—
a
section 1082 for provision about research and development expenditure of group companies, and
b
section 1083 for provision about refunds of qualifying Chapter 3 expenditure.