Part 3Trading income
F1CHAPTER 6ATrade profits: R&D expenditure credits
Claims for credits
104AR&D expenditure credits
(1)
A company carrying on a trade may make a claim for an amount (an “R&D expenditure credit”) to be brought into account as a receipt in calculating the profits of the trade for an accounting period.
(2)
The company is entitled to an R&D expenditure credit for the accounting period if the company has qualifying R&D expenditure which is allowable as a deduction in calculating for corporation tax purposes the profits of the trade for the accounting period.
(3)
In the case of a company that is a small or medium-sized enterprise in the accounting period, the company's “qualifying R&D expenditure” means—
(a)
its qualifying expenditure on sub-contracted R&D (see section 104C),
(b)
its subsidised qualifying expenditure (see section 104F), and
(c)
its capped R&D expenditure (see section 104I).
(4)
In the case of a company that is a large company throughout the accounting period, the company's “qualifying R&D expenditure” means—
(a)
its qualifying expenditure on in-house direct research and development (see section 104J),
(b)
its qualifying expenditure on contracted out research and development (see section 104K), and
(c)
its qualifying expenditure on contributions to independent research and development (see section 104L).
(5)
The amount of an R&D expenditure credit to which a company is entitled is determined in accordance with section 104M.
(6)
Section 104N contains provision about the effect of a successful claim for an R&D expenditure credit.
(7)
Sections 104U to 104W contain provision about insurance companies and group companies.
(8)
Section 104X contains anti-avoidance provision.
(9)
Section 104Y contains definitions.
(10)
For information about the procedure for making claims under this Chapter, see Schedule 18 to FA 1998, in particular Part 9A of that Schedule.