SCHEDULES

SCHEDULE 13Tax relief for expenditure on vaccine research etc

Part 1Entitlement to relief

8Treatment of sub-contractor payment where principal and sub-contractor are connected persons

1

Where the principal and the sub-contractor are connected persons and in accordance with generally accepted accounting practice—

a

the whole of the sub-contractor payment has been brought into account in determining the sub-contractor’s profit or loss for a relevant period, and

b

all of the sub-contractor’s relevant expenditure has been so brought into account,

the whole of the payment (up to the amount of the sub-contractor’s relevant expenditure) is qualifying expenditure on sub-contracted research and development.

This is subject to paragraph 7 (conditions that must be satisfied by qualifying expenditure on sub-contracted R&D).

2

In sub-paragraph (1)—

a

“relevant expenditure” has the meaning given by paragraph 9, and

b

“relevant period” means a period—

i

for which accounts are drawn up by the sub-contractor, and

ii

that ends not more than twelve months after the end of the principal’s period of account in which the sub-contractor payment is, in accordance with generally accepted accounting practice, brought into account in determining the principal’s profit or loss.

3

Any apportionment of expenditure of the principal or the sub-contractor necessary for the purposes of this paragraph shall be made on a just and reasonable basis.