Capital Allowances Act 2001 section 335

Writing off research and development allowances

Section 335 explains how research and development (R&D) allowances are written off against qualifying expenditure and how this interacts with balancing events.

• When an R&D allowance is granted under Part 6 of the Act, the allowance amount is written off at the end of the chargeable period in which it is made.
• The write-off reduces the residue (i.e. the unrelieved balance) of qualifying expenditure for R&D purposes.
• If a balancing event occurs at the end of the same chargeable period, the written-off amount must be taken into account when calculating the residue of qualifying expenditure immediately before that event.
• This calculation determines whether any balancing adjustment — either a balancing charge or a balancing allowance — needs to be made.