Part 3

Trading income
Chapter 5

Trade profits: rules allowing deductions

Scientific research

Payments to research associations, universities etc
88
1
If a company carrying on a trade—
a
pays any sum to a body in the case of which exemption may be claimed as a result of section 491 of CTA 2010 (scientific research associations) and which has as its object the undertaking of research and development which may lead to or facilitate an extension of the appropriate class of trade, or
b
pays to an approved university, college, research institute or other similar institution any sum to be used for scientific research related to the appropriate class of trade,
a deduction is allowed for the sum in calculating the profits of the trade.
2
The deduction is allowed for the accounting period in which the payment is made.
3
In this section—
a
“the appropriate class of trade” means the class of trade to which the trade carried on by the company belongs, and
b
“scientific research” means any activities in the fields of natural or applied science for the extension of knowledge.
4
For the purposes of this section a university, college research institute or other similar institution is approved if it is for the time being approved for the purposes of this section by the Secretary of State.
5
The reference in subsection (1)(b) to scientific research related to the appropriate class of trade includes—
a
scientific research which may lead to or facilitate an extension of trades of the appropriate class, and
b
scientific research of a medical nature which has a special relation to the welfare of workers employed in trades of the appropriate class.
6
If a question arises as to—
a
whether, or
b
to what extent,
any activities constitute or constituted scientific research, an officer of Revenue and Customs must refer the question for decision to the Secretary of State, whose decision is final.
7
The same expenses may not be brought into account under this section in relation to more than one trade.
Words in s. 88(1)(a) 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. 595(a) (with Sch. 2)
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)
Words in s. 88(1)(a) 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. 595(b) (with Sch. 2)