Corporation Tax Act 2009 section 1042B

Entitlement to credit

Section 1042B sets out the three conditions a company must meet to be entitled to an R&D expenditure credit for an accounting period.

• The company must be carrying on a trade during the accounting period in question.
• The company must have incurred expenditure that is both allowable as a deduction in calculating the trade's profits for corporation tax purposes and counts as qualifying R&D expenditure (covering in-house R&D, contracted-out R&D, or work done as a contractor for an irrelievable client).
• The company must not be an ineligible company as defined elsewhere in the Act.
• Where all three conditions are met, the credit is calculated as the relevant percentage of the qualifying expenditure.