SCHEDULES
C1SCHEDULE 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.
F13
The second condition is that the expenditure—
a
is incurred on staffing costs,
F6ba
is incurred on relevant payments to the subjects of a clinical trial, 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
ii
which is carried on wholly or partly in the United Kingdom and the profits of which are chargeable to tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005.
Sch. 12 modified (with effect as specified in art. 2 of the commencing S.I. of the commencing S.I.) by Finance Act 2004 (c. 12), s. 53(2)(6); S.I. 2004/3268, art. 2