Corporation Tax Act 2009 section 1042G

Percentage of qualifying expenditure translated into credit

Section 1042G sets the percentage rates used to calculate the R&D expenditure credit from qualifying expenditure, distinguishing between ring fence trades (oil and gas) and all other trades.

  • Qualifying R&D expenditure is converted into a credit by applying a specified percentage rate
  • For ring fence trades (broadly, oil and gas extraction activities), the rate is 49%
  • For all other trades, the rate is 20%
  • The Treasury has the power to change either percentage rate by regulations

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