Corporation Tax Act 2009 section 104J

Qualifying expenditure on in-house direct R&D

Section 104J defines what counts as qualifying expenditure on in-house direct research and development for large companies claiming R&D tax relief.

• Qualifying expenditure covers staffing costs, software, consumable items, payments for external workers, and payments relating to clinical trial subjects.
• The expenditure must relate to research and development that the company carries out itself (i.e. in-house), rather than work it contracts out to a third party.
• The expenditure qualifies where it is contracted out by a large company, or by another person who does not carry on a trade chargeable to UK tax.
• A chargeable trade means a business that is subject to either UK income tax or UK corporation tax.