C1Part 3Trading income
F1CHAPTER 6ATrade profits: R&D expenditure credits
Pt. 3 Ch. 6A inserted (with effect in accordance with Sch. 15 para. 27 of the amending Act) by Finance Act 2013 (c. 29), Sch. 15 para. 1
Payment of credit
104OAmounts deducted by way of tax adjustment
1
This section applies if—
a
a company is entitled to an R&D expenditure credit for an accounting period under this Chapter, and
b
the amount of the set-off amount remaining after step 1 in section 104N(2) is greater than the net value of the set-off amount.
2
An amount equal to the difference between—
a
the amount remaining after step 1 in section 104N(2), and
b
the net value of the set-off amount,
(“the step 2 amount”) is to be applied in discharging any liability of the company to pay corporation tax for any subsequent accounting period.
This is subject to subsection (3).
3
If the company is a member of a group, it may surrender the whole or any part of the step 2 amount to any other member of the group (the “relevant group member”).
In such a case, section 104R(3) applies to the amount surrendered as it applies to an amount of R&D expenditure credit surrendered under step 5 in section 104N(2).
4
If any of the amount surrendered under subsection (3) is remaining after the operation of step 3 in section 104R(3), it is to be treated for the purposes of this section as if it had not been surrendered to the relevant group member.
5
Any amounts to be applied under subsection (2) or (3) in discharging any liability of a company to pay corporation tax for an accounting period are to be so applied before any amounts that may be so applied under step 1, 4 or 5 in section 104N(2).
6
The surrender by a company of the whole or any part of the step 2 amount to another company under this section—
a
is not to be taken into account in determining the profits or losses of either company for corporation tax purposes, and
b
for corporation tax purposes is not to be regarded as the making of a distribution.
7
Any reference in this section to the set-off amount, or the net value of the set-off amount, is to be read in accordance with section 104N.
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)