Corporation Tax Act 2009

[F1 1058A Relevant expenditure on workers U.K.

(1) For the purposes of section 1058, the amount of a company's relevant expenditure on workers for a payment period is the sum of—

(a) the total amount of the company's PAYE and NIC liabilities for the payment period (see section 1058B) less any amount deducted in accordance with section 1058C (avoiding double counting of PAYE and NIC liabilities),

(b) if the company is connected with another company and has incurred qualifying expenditure on externally provided workers (see section 1127), the relevant portion of any staffing costs for the payment period incurred by the connected company in providing any of those workers for the company (see subsection (2)), and

(c) if the company is connected with another company and has incurred qualifying expenditure on contracted out research and development (see section 1053), any staffing costs for the payment period incurred by the connected company in undertaking any of that contracted out research and development on behalf of the company (see subsection (3)).

(2) The relevant portion of any staffing costs for a payment period incurred by a connected company in providing externally provided workers for a company is the sum of the amounts to be determined in the case of each of those workers as follows—

• Step 1 Calculate the amount of expenditure that—

  (a)

  has been incurred by the connected company in providing the externally provided worker for the company,

  (b)

  has been incurred on staffing costs (see section 1123), and

  (c)

  forms part of the total amount of the connected company's PAYE and NIC liabilities for the payment period.

• Step 2 Calculate the percentage (“the appropriate percentage”) given by—

  

  where—

  R is the amount of the company's qualifying expenditure on the externally provided worker that has been taken into account in calculating the amount of the company's qualifying Chapter 2 expenditure (see section 1051) for the payment period, and

  T is the total amount of the company's qualifying expenditure on the externally provided worker (see section 1127) for the payment period.

• Step 3 The amount to be determined in the case of the externally provided worker is the appropriate percentage of the amount given by step 1.

(3) The staffing costs for a payment period incurred by a connected company in undertaking contracted out research and development on behalf of a company is the amount of expenditure that—

(a) has been incurred by the connected company in undertaking relevant research and development on behalf of the company,

(b) has been incurred on staffing costs (see section 1123), and

(c) forms part of the total amount of the connected company's PAYE and NIC liabilities for the payment period.

(4) If, for the purposes of step 1(c) of subsection (2) or paragraph (c) of subsection (3), it is necessary to calculate the amount of a connected company's PAYE and NIC liabilities for a payment period that falls within (but is shorter than) the connected company's payment period, the total amount for the connected company's payment period is proportionately reduced.]

Textual Amendments

F1 Ss. 1058A-1058D inserted (with effect in accordance with Sch. 3 para. 4 of the amending Act) by Finance Act 2021 (c. 26), Sch. 3 para. 3