SCHEDULES
SCHEDULE 12Tax relief for expenditure on research and development
Part 1Entitlement to relief for R&D expenditure: large companies
4Qualifying expenditure on direct research and development
1
The company’s qualifying expenditure on direct research and development is expenditure incurred by it where the following conditions are satisfied.
2
The first condition is that the expenditure is incurred on research and development directly undertaken by the company.
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The second condition is that the expenditure—
a
is incurred on staffing costs,
b
is incurred on consumable stores, or
c
is qualifying expenditure on externally provided workers.
4
The third condition is that the expenditure is attributable to relevant research and development in relation to the company.
5
The fourth condition is that the expenditure is not of a capital nature.
6
The fifth condition is that, if the expenditure is incurred in carrying on activities contracted out to the company, they are contracted out—
a
by a large company, or
b
by any person otherwise than in the course of a trade, profession or vocation the profits of which are chargeable to tax under Case I or II of Schedule D.