Section 88 Payments to research associations, universities etc.
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(1) If a person carrying on a trade—
[(a) pays any sum to an Association in the case of which exemption may be claimed under section 508 of ICTA and which has as its object the undertaking of research and development which may lead to or facilitate an extension of the class of trade to which the trade carried on by the person belongs, or
(b) pays any sum to be used for scientific research related to that class of trade]1 to an approved university, college research institute or other similar institution,
a deduction is allowed for the sum in calculating the profits of the trade.
Amendments
1 Substituted by Finance (No. 2) Act 2005 section 14(2), in relation to sums paid to an Association during any accounting period of the Association beginning on or after 1 January 2008.
(2) The deduction is allowed for the period of account in which the payment is made.
(3) “Scientific research” means any activities in the fields of natural or applied science for the extension of knowledge.
(4) For the purposes of this section—
(a) ...1
(b) a university, college research institute or other similar institution,
is approved if it is for the time being approved for the purposes of this section by the Secretary of State.
Amendments
1 Para (a) omitted by Finance (No. 2) Act 2005 section 14(3) and repealed by Finance (No. 2) Act 2005 section 70 and Schedule 11 Part 2(2) in relation to sums paid to an Association during any accounting period of the Association beginning on or after 1 January 2008.
(5) The [reference in subsection (1)(b)]1 to scientific research related to a class of trade include—
(a) scientific research which may lead to or facilitate an extension of trades of the class, and
(b) scientific research of a medical nature which has a special relation to the welfare of workers employed in trades of the class.
Amendments
1 Substituted for the words “references in this section” by Finance (No. 2) Act 2005 section 14(4) in relation to sums paid to an Association during any accounting period of the Association beginning on or after 1 January 2008.
(6) If a question arises as to—
(a) whether, or
(b) [to]1 what extent,
any activities constitute or constituted scientific research, [an officer of Revenue and Customs]2 must refer the question for decision to the Secretary of State, whose decision is final.
Amendments
1 Inserted by Corporation Tax Act 2009 section 1322 and Schedule 1 para 600 for 2009-10 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending on or after 1 April 2009 (for corporation tax purposes).
2 Substituted for the words “the Inland Revenue” by Commissioners for Revenue and Customs Act 2005 section 50 and Schedule 4 para 132(1) from 18 April 2005.
(7) The same expenses may not be brought into account under this section in relation to more than one trade.
(8) This section does not apply to professions or vocations.
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