Qualifying R&D expenditureU.K.
3(1)For the purposes of this Schedule “qualifying R&D expenditure” of a company means expenditure that meets the following conditions.U.K.
(2)The first condition is that the expenditure is not of a capital nature.
(3)The second condition is that the expenditure is attributable to relevant research and development (see paragraph 4) directly undertaken by the company or on its behalf.
[F1(4)The third condition is that the expenditure—
(a)is incurred on staffing costs (see paragraph 5),
(b)is incurred on [F2software or consumable items] (see paragraph 6),
[F3(ba)is incurred on relevant payments to the subjects of a clinical trial (see paragraph 6A),]
(c)is qualifying expenditure on externally provided workers (see paragraphs 8A to 8E), or
(d)is qualifying expenditure on sub-contracted research and development (see paragraphs 9 to 12).]
(5)The fourth condition is that any intellectual property (see paragraph 7) created as a result of the research and development to which the expenditure is attributable is, or will be, vested in the company (whether alone or with other persons).
(6)The fifth condition is that the expenditure is not incurred by the company in carrying on activities the carrying on of which is contracted out to the company by any person.
(7)The sixth condition is that the expenditure is not subsidised (see paragraph 8).
Textual Amendments
F1Sch. 20 para. 3(4) substituted (10.7.2003) (with effect in accordance with s. 168(3)(a) of the amending Act) by Finance Act 2003 (c. 14), Sch. 31 para. 4
F2Words in Sch. 20 substituted (1.4.2005) (with effect in accordance with s. 141(3)-(7) of the amending Act) by Finance Act 2004 (c. 12), s. 141(2)(a); S.I. 2005/123, art. 2
F3Sch. 20 para. 3(4)(ba) inserted (1.8.2008) by Finance Act 2006 (c. 25), s. 28(3)-(6), Sch. 2 para. 1(2); S.I. 2008/1878, art. 2