Corporation Tax Act 2009 section 1058C

Avoiding double counting of PAYE and NIC liabilities

Section 1058C prevents a company from claiming R&D relief twice on the same PAYE and NIC costs by requiring certain amounts to be deducted when calculating expenditure on workers.

• When calculating a company's expenditure on workers for a payment period, certain deductions must be made from total PAYE and NIC obligations
• Staffing costs relating to external workers provided to a connected company must be subtracted
• Staffing costs for contracted-out R&D work carried out for a connected company must also be subtracted
• The aim is to ensure that the same PAYE and NIC liabilities are not counted more than once across connected companies' R&D claims