Corporation Tax Act 2009 section 1043

Overview of Chapter

Section 1043 provides an overview of the Chapter 2 reliefs available to loss-making small and medium-sized enterprises that invest heavily in research and development.

• This Chapter provides R&D relief for SMEs that are R&D-intensive but do not generate trading profits — relief takes the form of either an additional deduction for loss-making trades (section 1044) or a deemed trading loss for pre-trading R&D activities (section 1045)
• A company must meet an R&D intensity condition (section 1045ZA) to qualify, and there are specific rules governing the procedure for claiming relief, restrictions on consortium relief, and the types of qualifying expenditure (sections 1047–1053)
• Where trading losses are increased or created by the relief, the company may be able to claim a payable R&D tax credit (sections 1054–1062), providing a cash benefit even when no corporation tax is payable
• Certain insurance companies are excluded from the Chapter (section 1062A), and the Chapter must be read alongside Chapter 8, which imposes various limitations on the reliefs available