Corporation Tax Act 2009

Introductory

1085 Overview of Chapter

(1) This Chapter provides for relief for expenditure incurred by companies (whether they are small or medium-sized enterprises or large companies) on research and development relating to vaccine or medicine research.

(2) Section 1086 defines “qualifying R&D activity” (that is, the research and development in relation to which relief under this Chapter is available).

(3) The reliefs available are—

(a) a deduction under section 1087 (the amount of which is determined under section 1089 or 1091), or

(b) if the company is a small or medium-sized enterprise, a deemed trading loss under section 1092.

(4) Section 1094 prevents a company which is a small or medium-sized enterprise from making a claim or election for relief if it is not a going concern.

(5) Sections 1095 to 1102 contain provision relevant to the reliefs available under this Chapter, namely—

(a) information about elections under section 1092 of a deemed trading loss (see section 1095),

(b) information about the treatment of a deemed trading loss (see section 1096),

(c) provision about when a company meets the R&D threshold for the purposes of obtaining relief (see section 1097),

(d) provision about when a company’s expenditure is “qualifying Chapter 7 expenditure” for those purposes and when such expenditure is “for” an accounting period (see sections 1098 to 1102).

(6) Sections 1103 to 1111 deal with R&D tax credits which can be claimed if a company—

(a) is a small or medium-sized enterprise,

(b) obtains relief under this Chapter, and

(c) makes, or is treated as making, a trading loss.

(7) Section 1112 contains an anti-avoidance provision dealing with artificially inflated claims for relief or R&D tax credits under this Chapter.

(8) See also section 1137 for provision about the accounting periods of a company which is not within the charge to corporation tax.

1086 Meaning of “qualifying R&D activity”

(1) For the purposes of this Chapter “qualifying R&D activity” means research and development relating to—

(a) vaccines or medicines for the prevention or treatment of tuberculosis,

(b) vaccines or medicines for the prevention or treatment of malaria,

(c) vaccines for the prevention of infection by human immunodeficiency virus, or

(d) vaccines or medicines for the prevention of the onset, or for the treatment, of acquired immune deficiency syndrome resulting from infection by human immunodeficiency virus in prescribed clades only.

(2) For the purposes of subsection (1) “prescribed clade” means clade A, C, D or E or such other clade or clades as the Treasury may by regulations prescribe.

(3) The Treasury may make provision by regulations further defining the purposes referred to in subsection (1).

(4) In subsection (1) references to vaccines or medicines are to vaccines or medicines for use in humans.