SCHEDULES

SCHEDULE 13Tax relief for expenditure on vaccine research etc

Part 1Entitlement to relief

I12Qualifying expenditure

1

For the purposes of this Schedule “qualifying expenditure” means—

a

qualifying expenditure on direct research and development (see paragraphs 3 to 5),

b

qualifying expenditure on sub-contracted research and development (see paragraphs 6 to 11), or

c

qualifying expenditure on contributions to independent research and development (see paragraph 12).

2

The qualifying expenditure of a company “for an accounting period” is determined as follows.

3

The qualifying expenditure on direct or sub-contracted research and development for an accounting period is—

a

in the case of company that qualifies as a small or medium-sized enterprise in that period, qualifying expenditure that—

i

is deductible in computing for tax purposes the profits for that period of a trade carried on by the company, or

ii

would have been so deductible had the company, at the time the expenditure was incurred, been carrying on a trade consisting of the activities in respect of which it was incurred,

(disregarding for this purpose section 401 of the Taxes Act 1988 (pre-trading expenditure treated as incurred when trading begins));

b

in the case of a company that does not qualify as a small or medium-sized enterprise in that period, qualifying expenditure that is deductible in computing for tax purposes the profits for that period of a trade carried on by the company (including expenditure that is so deductible by virtue of section 401 of the Taxes Act 1988).

4

The qualifying expenditure on contributions to independent research and development for an accounting period is the expenditure that is incurred on contributions paid in that period.