Part 13Additional relief for expenditure on research and development
Chapter 1Introduction
Introductory
1039Overview of Part
1
This Part provides for corporation tax relief for expenditure on research and development.
2
Relief under this Part is in addition to any deduction given under section 87 for the expenditure.
3
Relief under F6Chapter 2 is available to a company which is a small or medium-sized enterprise, in particular—
a
Chapter 2 provides for relief where the cost of in-house direct research and development or contracted out research and development is incurred by the company,
F7b
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F7c
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F84
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5
Chapter 6 contains further provision in relation to relief under F9Chapter 2 , in particular—
a
section 1081 provides for certain insurance companies to be treated as large companies,
F10b
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F10c
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d
section 1084 contains an anti-avoidance provision dealing with artificially inflated claims for relief or R&D tax credits (as to which, see subsection (7) below).
6
Relief under Chapter 7 is available to F3large companies where expenditure is incurred on vaccine or medicine research.
7
F4Chapter 2 also provides for the payment of tax credits (“R&D tax credits”) where a company which is a small or medium-sized enterprise—
a
obtains relief under Chapter 2 F5..., and
b
makes, or is treated as making, a trading loss.
8
Chapter 8 contains provision limiting the amount of relief available under Chapter 2 or 7 in relation to expenditure on a particular research and development project.
9
Chapter 9 contains supplementary provision, including definitions.
10
For information about the procedure for making claims under this Part see Schedule 18 to FA 1998, in particular Part 9A of that Schedule (claims for R&D tax reliefs).
1040Relief may be available under more than one Chapter of Part
Expenditure may be eligible for relief under more than one Chapter of this Part.
1040ZAF12Restriction on claiming other tax reliefs
1
For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15 (film tax relief), see section 1195(3A).
2
For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15A (television tax relief), see section 1216C(4).
3
For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15B (video games tax relief), see section 1217C(4).
1040AF11R&D expenditure credits
1
For provision enabling a company carrying on a trade to make a claim for an amount in respect of expenditure on research and development (an “R&D expenditure credit”) to be brought into account as a receipt in calculating the profits of the trade for an accounting period, see Chapter 6A of Part 3.
2
For provision prohibiting a company from making a claim for an R&D expenditure credit and for relief under this Part in respect of the same expenditure, see section 104B.
Interpretation
1041“Research and development”
In this Part “research and development” has the meaning given by F1section 1138 of CTA 2010.
1042“Relevant research and development”
1
In this Part “relevant research and development”, in relation to a company, means research and development—
a
related to a trade carried on by the company, or
b
from which it is intended that a trade to be carried on by the company will be derived.
2
Research and development related to a trade carried on by a company includes—
a
research and development which may lead to or facilitate an extension of the trade, and
b
research and development of a medical nature which has a special relation to the welfare of workers employed in the trade.
3
But any reference to “relevant research and development” which applies for the purposes of Chapter 7 (relief for F2... large companies: vaccine research etc) is to be read as if subsection (2)(b) were omitted.