Finance Act 2007

49 Vaccine research relief: amount of deduction for SMEs

(1) Part 2 of Schedule 13 to FA 2002 (manner of giving effect to vaccine research relief: small and medium-sized companies) is amended as follows.

(2) In paragraph 14 (deduction in computing profits of trade), for sub-paragraph (2) substitute—

“(2) The appropriate deduction is 50% of the qualifying expenditure.”

(3) In paragraph 15 (alternative treatment of pre-trading expenditure: deemed trading loss)—

(a) in sub-paragraph (2)(b), for the words from “not” to the end substitute “non-Schedule 20 expenditure.”, and

(b) after sub-paragraph (6) insert—

“(7) Qualifying expenditure is “non-Schedule 20 expenditure” if the company is not entitled to relief under Schedule 20 to the Finance Act 2000 in respect of it.”

(4) In paragraph 16 (entitlement to tax credit), for sub-paragraph (3) substitute—

“(3) The amount of the surrenderable loss is equal to the lower of A and B where—

• A is so much of the trading loss referred to in sub-paragraph (2) as is unrelieved, and

• B is—

  (a)

  if paragraph 14 applies, the sum of the amount deductible under that paragraph and so much of the qualifying expenditure mentioned in that paragraph as is non-Schedule 20 expenditure;

  (b)

  if paragraph 15 applies, the total deemed trading loss under that paragraph.”

(5) After sub-paragraph (5) of that paragraph insert—

“(6) Paragraph 15(7) (meaning of “non-Schedule 20 expenditure”) applies for the purposes of sub-paragraph (3).”

(6) The amendments made by this section have effect in relation to expenditure incurred on or after 1st April 2007.