Relevant expenditure of the sub-contractor
9(1)For the purposes of paragraph 8 the “relevant expenditure” of the sub-contractor is expenditure that—
(a)is incurred by the sub-contractor in carrying on, on behalf of the principal, the activities to which the sub-contractor payment relates, and
(b)satisfies the following conditions.
(2)The first condition is that the expenditure is not of a capital nature as regards the sub-contractor.
(3)The second condition is that the expenditure is incurred—
(a)on staffing costs, or
(b)on consumable stores.
In applying (by virtue of paragraph 5 above) paragraph 5 of Schedule 20 to the Finance Act 2000 (c. 17) (meaning of “staffing costs”) for the purposes of this sub-paragraph, the references to the company shall be read as references to the sub-contractor.
(4)The third condition is that the expenditure is not subsidised.
In applying (by virtue of paragraph 5 above) paragraph 8 of that Schedule (subsidised expenditure) for the purposes of this paragraph, the references to the company shall be read as references to the sub-contractor.