837A Meaning of “research and development”.

1

The following provisions have effect for the purposes of, and subject to, the provisions of the Tax Acts which apply this section.

2

“Research and development” means activities that fall to be treated as research and development in accordance with normal accounting practice.

This is subject to regulations under subsection (3) below.

3

The Treasury may by regulations provide—

a

that such activities as may be prescribed are not “research and development” for the purposes of this section, and

b

that such other activities as may be prescribed are “research and development” for those purposes.

4

Regulations under subsection (3) above may—

a

make provision by reference to guidelines issued (whether before or after the coming into force of this section) by the Secretary of State, and

b

make such supplementary, incidental, consequential or transitional provision as appears to the Treasury to be necessary or expedient.

5

In subsection (2) above “normal accounting practice” means normal accounting practice in relation to the accounts of companies incorporated in a part of the United Kingdom.

6

Unless otherwise expressly provided, “research and development" does not include oil and gas exploration and appraisal.