Corporation Tax Act 2009 section 113

R&D threshold in section 1050: qualifying Chapter 3 and 4 expenditure

Section 113 restricts the qualifying expenditure that counts towards the R&D expenditure threshold in section 1050 by excluding amounts incurred before 1 April 2002.

• The R&D threshold test in section 1050 requires companies to meet certain levels of qualifying expenditure under Chapters 3 and 4.
• Any qualifying Chapter 3 or Chapter 4 expenditure incurred before 1 April 2002 is excluded from the threshold calculation.
• Pre-trading expenses (as defined in section 61) cannot be used to backdate expenditure into the qualifying period — section 61 is disregarded for this purpose.
• This transitional rule ensures that only expenditure from 1 April 2002 onwards is relevant when determining whether the R&D threshold is met.