Corporation Tax Act 2009 section 118

Small or medium-sized enterprises

Section 118 deals with transitional rules for the "larger SME" provisions in Part 13 (additional relief for research and development expenditure), specifying how these provisions apply depending on when expenditure was incurred.

• For R&D expenditure incurred before 1 August 2008, Part 13 applies without the special "larger SME" provisions
• The "larger SME provisions" are a specific set of sections (1089(4), 1090, 1093, 1104(5), qualification 1 in 1120(2), and 1121) that modify how R&D relief works for larger small and medium-sized enterprises
• These provisions cover modifications to deduction amounts, surrenderable losses, and the definition of a "larger SME"
• However, when determining whether a company qualifies as an SME for expenditure incurred on or after 1 August 2008, the larger SME provisions are treated as if they had always been in force