Finance Act 2008

Section 26

SCHEDULE 8 Rates of research and development relief and vaccine research relief

Rates of research and development relief: SMEs

1 (1) Part 2 of Schedule 20 to FA 2000 (giving effect to R&D tax relief) is amended as follows.

(2) In each of the following provisions, for “150%” substitute “175%”—

(a) paragraph 13 (deduction in computing profits of trade),

(b) paragraph 14(2) (alternative treatment of pre-trading expenditure), and

(c) paragraph 15(3)(b) (entitlement to R&D tax credit).

(3) In paragraph 16(1)(a) (amount of R&D tax credit), for “16%” substitute “14%”.

(4) The amendments made by this paragraph have effect in relation to expenditure incurred on or after such day as the Treasury may by order appoint.

(5) The Treasury may appoint a day before the day on which this Act is passed, but not one before 1 April 2008.

Rates of research and development tax relief: large companies

2 (1) In Schedule 12 to FA 2002 (tax relief for expenditure on research and development), in both of the following provisions, for “25%” substitute “30%”—

(a) paragraph 11(2) (deduction in computing profits of trade), and

(b) paragraph 15(4) (refunds of contributions to independent research and development etc).

(2) The amendments made by sub-paragraph (1) have effect in relation to expenditure incurred on or after 1 April 2008.

Rates of vaccine research relief

3 (1) Schedule 13 to FA 2002 (vaccine research relief) is amended as follows.

(2) In each of the following provisions, for “50%” substitute “40%”—

(a) paragraph 14(2) (deduction in computing profits of trade: small and medium-sized companies),

(b) paragraph 15(2)(a) (alternative treatment of pre-trading expenditure: deemed trading loss),

(c) paragraph 15A(2) (modifications for larger SMEs claiming R&D tax credits),

(d) paragraph 21(2) (deduction in computing profits of trade: large companies), and

(e) paragraph 25(4)(a)(i) and (b)(i) (refunds of contributions to independent research and development).

(3) In each of the following provisions, for “150%” substitute “140%”—

(a) paragraph 15(2)(b) (alternative treatment of pre-trading expenditure: deemed trading loss),

(b) paragraph 16A(1) (entitlement to tax credit: modifications for larger SMEs),

(c) paragraph 21(3) (deduction in computing profits of trade: large companies), and

(d) paragraph 25(4)(a)(ii) and (b)(ii) (refunds of contributions to independent research and development).

(4) The amendments made by this paragraph have effect in relation to expenditure incurred on or after such day as the Treasury may by order appoint.

(5) The Treasury may appoint a day before the day on which this Act is passed, but not one before 1 April 2008.