The amount of the R&D tax credit to which a company is entitled for an accounting period is 16% of the amount of the Chapter 7 surrenderable loss for the period.

Subsection (1) is subject to the limit set out in subsection (3).

The limit is that the total of the R&D tax credits to which the company is entitled for the accounting period under Chapter 2 and this Chapter is not to exceed the total amount of the company’s PAYE and NIC liabilities for payment periods ending in the accounting period (see section 1108).

The Treasury may by order replace the percentage for the time being specified in subsection (1) with a different percentage.

An order under subsection (4) may contain incidental, supplemental, consequential and transitional provision and savings.