Part 13 U.K.Additional relief for expenditure on research and development

Chapter 3 U.K.Relief for SMEs: R&D sub-contracted to SME

Threshold U.K.

1064 R&D threshold U.K.

(1) For the purposes of this Chapter a company meets the R&D threshold in an accounting period if its total qualifying R&D expenditure for the period is at least—

(a) £10,000, if the accounting period is a period of 12 months, or

(b) the amount given by subsection (2), if the accounting period is a period of less than 12 months.

(2) The amount referred to in subsection (1)(b) is—

where X is the number of days in the accounting period.

(3) A company's “total qualifying R&D expenditure” for an accounting period is the sum of—

(a) its qualifying Chapter 2 expenditure (see section 1051),

(b) its qualifying Chapter 3 expenditure (see section 1065), and

(c) its qualifying Chapter 4 expenditure (see section 1070),

that is deductible in the period.

(4) A company's expenditure is deductible in 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.

(5) Expenditure allowable as a deduction for the purposes of subsection (4) includes expenditure so allowable because of section 61 (pre-trading expenses).