Corporation Tax Act 2009 section 126

Staffing costs

Section 126 modifies the definition of staffing costs eligible for R&D tax relief for expenditure incurred in a specific transitional period between April 2003 and April 2004.

• This provision applies only to expenditure incurred before 1 April 2004 in accounting periods ending on or after 6 April 2003.
• During this transitional window, the normal staffing costs rules in section 1170 are modified to use a simpler definition of qualifying payments.
• The modified rule limits qualifying staffing costs to earnings paid by the company to its own directors or employees.
• Earnings for this purpose means earnings or amounts treated as earnings that constitute employment income as defined by ITEPA 2003.