Finance Act 2012

Abolition of vaccine research relief for SMEs U.K.

16 (1) Section 1039 (overview of Part 13) is amended as follows. U.K.

(2) In subsection (6), for the words from “companies” to “companies)” substitute “ large companies ”.

(3) In subsection (7)—

(a) for “Chapters 2 and 7 also provide” substitute “ Chapter 2 also provides ”, and

(b) in paragraph (a), omit “or 7”.

17 U.K. In section 1042 (“relevant research and development”), in subsection (3), omit “SMEs and”.

18 U.K. In section 1046 (relief only available where company is going concern), in subsection (2)(b), omit “or Chapter 7”.

19 U.K. In section 1057 (tax credit only available where company is going concern), in subsection (4)(b), omit “or Chapter 7”.

20 U.K. Chapter 7 (relief for SMEs and large companies: vaccine research etc) is amended as set out in paragraphs 21 to 30.

21 (1) Section 1085 (overview of Chapter) is amended as follows. U.K.

(2) In subsection (1), for the words from “companies” to “companies)” substitute “ large companies ”.

(3) For subsection (3) substitute—

“(3) The relief available is a deduction under section 1087 (the amount of which is determined under section 1091).”

(4) Omit subsection (4).

(5) For subsection (5) substitute—

“(5) Sections 1098 to 1102 contain provision about when a company's expenditure is “qualifying Chapter 7 expenditure” for the purposes of obtaining relief and when such expenditure is “for” an accounting period.”

(6) Omit subsection (6).

(7) In subsection (7), omit “or R&D tax credits”.

22 (1) Section 1087 (deduction in calculating profits of trade) is amended as follows. U.K.

(2) In subsection (1), for “and C” substitute “ , C and D ”.

(3) After subsection (4) insert—

“(4A) Condition D is that the company is a large company throughout the period.”

(4) For subsection (7) substitute—

“(7) For the amount of the deduction see section 1091.”

(5) In subsection (9)—

(a) in paragraph (a), omit “large”,

(b) omit paragraph (b), and

(c) in paragraph (d), for “sections 1099 and 1100” substitute “ section 1100 ”.

23 (1) In section 1088 (large companies: declaration about effect of relief), in subsection (1), omit “large”. U.K.

(2) Accordingly, the heading of that section becomes “ Declaration about effect of relief ”.

24 U.K. Omit sections 1089 and 1090 (which relate only to SMEs).

25 (1) In section 1091 (large companies: amount of deduction), in subsection (1), omit paragraph (b) (and the “and” before it). U.K.

(2) Accordingly, the heading of that section becomes “ Amount of deduction ”.

26 U.K. Omit sections 1092 to 1096 and 1099 (which relate only to SMEs).

27 (1) In section 1100 (large companies: qualifying expenditure “for” an accounting period), for subsection (1) substitute— U.K.

“(1) A company's qualifying Chapter 7 expenditure is “for” 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.”

(2) Accordingly, the heading of that section becomes “ Qualifying expenditure “for” an accounting period ”.

28 U.K. Omit sections 1103 to 1111 (tax credits).

29 (1) Section 1112 (artificially inflated claims for relief or tax credit) is amended as follows. U.K.

(2) In subsection (1), for “the purposes mentioned in subsection (2)” substitute “ the purpose of determining for an accounting period relief to which a company is entitled under this Chapter ”.

(3) Omit subsection (2).

(4) In subsection (3)—

(a) at the end of paragraph (a) insert “ or ”, and

(b) omit paragraphs (c) and (d).

(5) Accordingly, the heading of that section becomes “ Artificially inflated claims for relief ”.

30 U.K. The heading of Chapter 7 becomes “ Relief for large companies: vaccine research etc ”.

31 (1) Chapter 8 (cap on aid for R&D) is amended as follows. U.K.

(2) In section 1113 (cap on R&D aid under Chapter 2 or 7), in subsection (4)(b), omit “SMEs and”.

(3) In section 1115 (“the tax credits”), in subsection (1), omit “or 7”.

32 U.K. In consequence of the amendments made by paragraphs 16 to 31—

(a) in Schedule 4 to CTA 2009 (index of defined expressions), omit the entry for “Chapter 7 surrenderable loss”,

(b) in Schedule 1 to CTA 2010, omit paragraphs 672 to 674, and

(c) in section 43 of FA 2011, omit subsections (7) to (11).