Finance Act 2000

Entitlement to R&D tax credit

15 (1) A company may claim an R&D tax credit for an accounting period in which it has a surrenderable loss.

(2) A company has a “surrenderable loss” for this purpose if in an accounting period—

(a) paragraph 13 applies and the company incurs a trading loss in that period in the trade mentioned in sub-paragraph (1)(b) of that paragraph, or

(b) paragraph 14 applies and the company is treated under that paragraph as incurring a trading loss.

(3) The amount of the surrenderable loss is equal to—

(a) so much of that trading loss as is unrelieved, or

(b) if less, 150% of the related qualifying R&D expenditure.

(4) For this purpose the amount of a trading loss that is “unrelieved” means the amount of that loss reduced by the amount of—

(a) any relief that was or could have been obtained by the company making a claim under section 393A(1)(a) of the Taxes Act 1988 to set the loss against profits of whatever description of the same accounting period,

(b) any other relief obtained by the company in respect of the loss, including relief under section 393A(1)(b) of that Act (losses set against profits of an earlier accounting period), and

(c) any loss surrendered under section 403(1) (surrender of relief to group or consortium members) of that Act.

(5) No account shall be taken for this purpose of any losses—

(a) brought forward from an earlier accounting period under section 393(1) of the Taxes Act 1988, or

(b) carried back from a later accounting period under section 393A(1)(b) of that Act.