Income and Corporation Taxes Act 1988

82A Expenditure on research and development. U.K.

(1) Notwithstanding anything in section 74, where a [F1 company] carrying on a trade incurs expenditure not of a capital nature on research and development—

(a) related to that trade, and

(b) directly undertaken [F2 by the company or on the company's behalf],

the expenditure incurred may be deducted as an expense in computing the profits of the trade for the purposes of [F3 corporation] tax.

(2) For this purpose expenditure on research and development does not include expenditure incurred in the acquisition of rights in, or arising out of, research and development.

Subject to that, it includes all expenditure incurred in carrying out, or providing facilities for carrying out, research and development.

(3) The reference in subsection (1) above to research and development related to a trade includes—

(a) research and development which may lead to or facilitate an extension of that trade;

(b) research and development of a medical nature which has a special relation to the welfare of workers employed in that trade.

(4) The same expenditure may not be taken into account under this section in relation to more than one trade.

(5) In this section “research and development” has the meaning given by section 837A and includes oil and gas exploration and appraisal.

Textual Amendments

F1 Word in s. 82A(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 54(a) (with Sch. 2)

F2 Words in s. 82A(1)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 54(b) (with Sch. 2)

F3 Word in s. 82A(1) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 54(c) (with Sch. 2)

Modifications etc. (not altering text)

C1 S. 82A modified (1.1.2005 with effect in accordance with art. 2 of the commencing S.I.) by Finance Act 2004 (c. 12), s. 53(2); S.I. 2004/3268, art. 2