Modifications etc. (not altering text)
C1Sch. 13 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
Commencement Information
I1Sch. 13 has effect in relation to expenditure incurred on or after 22.4.2003 by The Finance Act 2002, Schedule 13 (Appointed Day) Order 2003 (S.I. 2003/1472), art. 2 (with para. 28(1))
8(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.