Modifications etc. (not altering text)
C1Sch. 20 restricted (22.4.2003) by Finance Act 2002 (c. 23), Sch. 13 para. 17(2); S.I. 2003/1472, art. 2
C2Sch. 20 modified (1.1.2005 with effect as specified in art. 2 of the commencing S.I.) by Finance Act 2004 (c. 12), s. 53(2)(6); S.I. 2004/3268, art. 2
2(1)For the purposes of this Schedule a “small or medium-sized enterprise” means [F1a micro, small or medium-sized enterprise as defined in Commission Recommendation 2003/361/EC of 6th May 2003 (“the Recommendation”, references to the Annex being references to the Annex to the Recommendation), subject to the following qualifications.U.K.
Qualification 1
If a company (“C”) is a micro, small or medium-sized enterprise, disregarding any partner enterprise or linked enterprise, and, taken alone, it would satisfy the employee limit and at least one of the financial limits, but—
the number of employees, annual turnover or annual balance sheet total (as the case may be) of a partner enterprise or linked enterprise to which it is related has been taken into account in determining whether the employee limit or the financial limits have been exceeded, and
a partner enterprise or linked enterprise to which C is related would, disregarding the number of employees, and the annual turnover and annual balance sheet totals of C, exceed the employee limit, or [F2both] of the financial limits,
Article 4(2) of the Annex shall be disregarded in determining whether C is a small or medium-sized enterprise for an accounting period in which it exceeds the employee or financial limits.
Here references to the employee limit and the financial limits are to the limits respectively on the number of employees, and the annual turnover and balance sheet totals, contained in Article 2(1) of the Annex.
Qualification 2
In relation to the first accounting period of an enterprise which ends on or after 1st January 2005, for the purpose of determining whether the enterprise is a small or medium-sized enterprise (see Article 4(2) of the Annex), the Recommendation shall be treated as applying to the immediately preceding accounting period.]
(2)The Treasury may by order amend sub-paragraph (1) so as to substitute another definition of “small or medium-sized enterprise" for the definition that is for the time being effective for the purposes of this Schedule.
Textual Amendments
F1Words in Sch. 20 para. 2(1) substituted (1.1.2005) (with effect in accordance with art. 1 of the amending S.I.) by Finance Act 2000, Schedule 20 (Definition of Small or Medium-Sized Enterprise) Order 2004 (S.I. 2004/3267), arts. 1, 2
F2Word in Sch. 20 para. 2(1) substituted (31.12.2005) (with effect in accordance with art. 1(2) of the amending S.I.) by Research and Development Tax Relief (Definition of "Small or Medium-Sized Enterprise") Order 2005 (S.I. 2005/3376), arts. 1(1), 2
Modifications etc. (not altering text)
C3Sch. 20 para. 2 applied (with modifications) (22.4.2003) by Finance Act 2002 (c. 23), Sch. 13 para. 5(3)(a); S.I. 2003/1472, art. 2