- Latest available (Revised)
- Point in Time (17/07/2013)
- Original (As enacted)
Version Superseded: 26/03/2015
Point in time view as at 17/07/2013.
Corporation Tax Act 2009, Chapter 7 is up to date with all changes known to be in force on or before 14 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Textual Amendments
F1Pt. 13 Ch. 7 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 30
(1)This Chapter provides for relief for expenditure incurred by [F2large companies] on research and development relating to vaccine or medicine research.
(2)Section 1086 defines “qualifying R&D activity” (that is, the research and development in relation to which relief under this Chapter is available).
[F3(3)The relief available is a deduction under section 1087 (the amount of which is determined under section 1091).]
F4(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F5(5)Sections 1098 to 1102 contain provision about when a company's expenditure is “qualifying Chapter 7 expenditure” for the purposes of obtaining relief and when such expenditure is “for” an accounting period.]
F6(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)Section 1112 contains an anti-avoidance provision dealing with artificially inflated claims for relief F7... under this Chapter.
(8)See also section 1137 for provision about the accounting periods of a company which is not within the charge to corporation tax.
Textual Amendments
F2Words in s. 1085(1) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 21(2)
F3S. 1085(3) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 21(3)
F4S. 1085(4) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 21(4)
F5S. 1085(5) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 21(5)
F6S. 1085(6) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 21(6)
F7Words in s. 1085(7) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 21(7)
(1)For the purposes of this Chapter “qualifying R&D activity” means research and development relating to—
(a)vaccines or medicines for the prevention or treatment of tuberculosis,
(b)vaccines or medicines for the prevention or treatment of malaria,
(c)vaccines for the prevention of infection by human immunodeficiency virus, or
(d)vaccines or medicines for the prevention of the onset, or for the treatment, of acquired immune deficiency syndrome resulting from infection by human immunodeficiency virus in prescribed clades only.
(2)For the purposes of subsection (1) “prescribed clade” means clade A, C, D or E or such other clade or clades as the Treasury may by regulations prescribe.
(3)The Treasury may make provision by regulations further defining the purposes referred to in subsection (1).
(4)In subsection (1) references to vaccines or medicines are to vaccines or medicines for use in humans.
(1)A company is entitled to corporation tax relief for an accounting period if it meets conditions AF8... [F9, C and D].
(2)Condition A is that the company has incurred expenditure which is qualifying Chapter 7 expenditure for the period.
F10(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)Condition C is that the company is carrying on a trade in the period.
[F11(4A)Condition D is that the company is a large company throughout the period.]
(5)For the company to obtain the relief it must make a claim.
(6)The relief is a deduction in calculating the profits of the trade for the period.
[F12(7)For the amount of the deduction see section 1091.]
(8)This section is subject to section 1113 (cap on total R&D aid in relation to a particular research and development project).
(9)See also—
(a)section 1088 for the declaration that a F13... company is required to make in a claim under this section,
F14(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)section 1098 for the meaning of “qualifying Chapter 7 expenditure”, and
(d)[F15section 1100] for the meaning of qualifying Chapter 7 expenditure “for” an accounting period.
Textual Amendments
F8Word in s. 1087(1) omitted (with effect in accordance with Sch. 3 para. 39 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 7(3)(a)
F9Words in s. 1087(1) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(2)
F10S. 1087(3) omitted (with effect in accordance with Sch. 3 para. 39 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 7(3)(b)
F11S. 1087(4A) inserted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(3)
F12S. 1087(7) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(4)
F13Word in s. 1087(9)(a) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(a)
F14S. 1087(9)(b) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(b)
F15Words in s. 1087(9)(d) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 22(5)(c)
(1)This section applies if a F17... company claims relief under section 1087.
(2)The claim must include a declaration that the availability of the relief claimed has resulted in an increase in—
(a)the amount, scope or speed of the research and development undertaken by the company, or
(b)the company's expenditure on research and development.
Textual Amendments
F16S. 1088 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 23(2)
F17Word in s. 1088(1) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 23(1)
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Textual Amendments
F18S. 1089 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 24
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Textual Amendments
F19S. 1090 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 24
(1)This section applies if—
(a)a company makes a claim under section 1087 for relief to which it is entitled for an accounting period, F21...
F21(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)The amount of the deduction under that section is the sum of—
(a)amount A, and
(b)amount B.
(3)Amount A is 40% of so much of the company's qualifying Chapter 7 expenditure for the period as is allowable as a deduction in calculating for corporation tax purposes the profits for the period of a trade carried on by the company.
(4)Amount B is 140% of so much of the company's qualifying Chapter 7 expenditure for the period that is not so allowable.
(5)The deduction is in addition to any other deduction in respect of the expenditure.
(6)See sections 1098 and 1100 for the meaning of “qualifying Chapter 7 expenditure” and provision about when such expenditure is “for” an accounting period.
Textual Amendments
F20S. 1091 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 25(2)
F21S. 1091(1)(b) and the word immediately preceding it omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 25(1)
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Textual Amendments
F22Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
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Textual Amendments
F22Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
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Textual Amendments
F22Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
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Textual Amendments
F22Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
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Textual Amendments
F22Ss. 1092-1096 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
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Textual Amendments
F23S. 1097 omitted (with effect in accordance with Sch. 3 para. 39 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 7(5)
For the purposes of this Part a company's “qualifying Chapter 7 expenditure” means—
(a)its qualifying expenditure on in-house direct research and development (see section 1101), and
(b)its qualifying expenditure on contracted out research and development (see section 1102).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F24S. 1099 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 26
[F26(1)A company's qualifying Chapter 7 expenditure is “for” an accounting period if it is allowable as a deduction in calculating for corporation tax purposes the profits for the period of a trade carried on by the company.]
(2)Expenditure allowable as a deduction for the purposes of subsection (1) includes expenditure so allowable because of section 61 (pre-trading expenses).
Textual Amendments
F25S. 1100 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 27(2)
F26S. 1100(1) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 27(1)
(1)A company's “qualifying expenditure on in-house direct research and development” means expenditure incurred by it in relation to which each of conditions A to E is met.
(2)Condition A is that the expenditure is attributable to qualifying R&D activity (see section 1086) undertaken by the company itself.
(3)Condition B is that the qualifying R&D activity to which the expenditure is attributable is relevant research and development in relation to the company.
(4)Condition C is that the expenditure is—
(a)incurred on staffing costs (see section 1123),
(b)incurred on software or consumable items (see section 1125),
(c)qualifying expenditure on externally provided workers (see section 1127), or
(d)incurred on relevant payments to the subjects of a clinical trial (see section 1140).
(5)Condition D is that the expenditure is not incurred by the company in carrying on activities which are contracted out to the company by any person.
(6)Condition E is that the expenditure is not subsidised (see section 1138).
(7)See sections 1124, 1126 and 1132 for provision about when expenditure within subsection (4)(a), (b) or (c) is attributable to relevant research and development.
(1)A company's “qualifying expenditure on contracted out research and development” means expenditure in relation to which each of conditions A to D is met.
(2)Condition A is that the expenditure is incurred in making the qualifying element of a sub-contractor payment (see sections 1134 to 1136) to a sub-contractor.
(3)Condition B is that the expenditure is attributable to qualifying R&D activity (see section 1086) undertaken by the sub-contractor itself.
(4)Condition C is that the R&D activity to which the expenditure is attributable is relevant research and development in relation to the company.
(5)Condition D is that the expenditure is not subsidised (see section 1138).
(6)See sections 1124, 1126 and 1132 for provision about when particular kinds of expenditure are attributable to relevant research and development.
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
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Textual Amendments
F27Ss. 1103-1111 omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 28
(1)To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it is to be disregarded for [F29the purpose of determining for an accounting period relief to which a company is entitled under this Chapter].
F30(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)Arrangements are entered into wholly or mainly for a “disqualifying purpose” if their main object, or one of their main objects, is to enable a company to obtain—
(a)relief under this Chapter to which it would not otherwise be entitled, [F31or]
(b)relief under this Chapter of a greater amount than that to which it would otherwise be entitled,
F32(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F32(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)In this section “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.
Textual Amendments
F28S. 1112 heading substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 29(5)
F29Words in s. 1112(1) substituted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 29(2)
F30S. 1112(2) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 29(3)
F31Word in s. 1112(3)(a) inserted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by Finance Act 2012 (c. 14), Sch. 3 para. 29(4)(a)
F32S. 1112(3)(c)(d) omitted (with effect in accordance with Sch. 3 para. 38 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 3 para. 29(4)(b)
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