Schedules
Schedule 1Relief for research and development
Part 4Miscellaneous amendments
15Amendment of CTA 2009
CTA 2009 is amended as follows.
16R&D tax relief: circumstances in which enterprises are treated as SMEs
1
In section 1119—
a
in subsection (1), at the end insert “(and see sections 1120A and 1120B)”
;
b
in subsection (2), for “section 1120” substitute “sections 1120 to 1120B”
.
2
In section 1120 (qualifications to section 1119)—
a
after subsection (6) insert—
6A
This section is subject to sections 1120A and 1120B.
b
in subsection (7), in the words before paragraph (a), after “section” insert “and in sections 1120A and 1120B”
.
3
After that section insert—
1120AEnterprise treated as an SME where related enterprise becomes large
1
This section applies, in relation to an accounting period, where the following conditions are met.
2
The first condition is that, for the duration of the accounting period, an enterprise (“E”) is related to a partner enterprise or linked enterprise (“F”).
3
The second condition is that, at the start of the accounting period, both E and F are small or medium-sized enterprises.
4
The third condition is that, at the end of the accounting period, E is not a small or medium-sized enterprise by reason only that F has, during the accounting period, exceeded the employee limit or either of the financial limits.
5
Both E and F are to be treated as if they were small or medium-sized enterprises for the accounting period.
1120BEnterprise treated as an SME where acquired by an SME
1
This section applies, in relation to an accounting period, where the following conditions are met.
2
The first condition is that, at the start of the accounting period, an enterprise (“E”) was not a small or medium-sized enterprise by reason only that a partner enterprise or linked enterprise to which E was related exceeded the employee limit or either of the financial limits.
3
The second condition is that, during the accounting period, control of E was acquired by a company that, at the time of the acquisition, was a small or medium-sized enterprise.
4
E is to be treated as if it were a small or medium-sized enterprise for the accounting period.
5
In subsection (3) “control” has the same meaning as in section 1124 of CTA 2010.
17Accounts treated as prepared on going concern basis
1
In section 104T (R&D expenditure credits: “going concern”), after subsection (4) insert—
4A
For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.
4B
For the purposes of this section a “relevant group transfer” is a transfer within the accounting period to which the latest published accounts relate by A of its trade and research and development to another member of the group mentioned in subsection (4A).
2
In section 1046 (R&D relief for SMEs: relief only available where company is going concern), after subsection (2C) insert—
2D
For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.
2E
For the purposes of this section—
a
a “relevant group transfer” is a transfer, within the accounting period to which the latest published accounts relate, by A of its trade and research and development to another member of the group mentioned in subsection (2D);
b
A and B are members of the same group if they are members of the same group of companies for the purposes of Part 5 of CTA 2010 (group relief).
3
In section 1057 (R&D relief for SMEs: tax credit only available where company is a going concern), after subsection (4C) insert—
4D
For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.
4E
For the purposes of this section—
a
a “relevant group transfer” is a transfer, within the accounting period to which the latest published accounts relate, by A of its trade and research and development to another member of the group mentioned in subsection (4D);
b
A and B are members of the same group if they are members of the same group of companies for the purposes of Part 5 of CTA 2010 (group relief).
18Meaning of expenditure incurred on payments
1
In section 104Y (R&D expenditure credits: interpretation), at the end insert—
4
References in this Chapter to expenditure incurred on payments (however expressed) are references to expenditure incurred on payments made before the making of a claim under this Chapter in relation to that expenditure.
2
Before section 1140 insert—
1139AExpenditure incurred on payments
1
References in this Part to expenditure incurred on payments (however expressed) are references to expenditure incurred on payments made before the making of a claim under this Part in relation to that expenditure.