Corporation Tax Act 2009 section 104M

Amount of R&D expenditure credit

Section 104M establishes the percentage rates used to calculate the R&D expenditure credit, including a higher rate for ring fence trades and the power for the Treasury to change these rates by order.

• The R&D expenditure credit is calculated as a percentage of a company's qualifying R&D expenditure.
• The standard rate of the credit is 20% of qualifying expenditure.
• A higher rate of 49% applies to companies carrying on a ring fence trade (broadly, oil and gas extraction activities in the UK and UK Continental Shelf).
• The Treasury has the power to amend either percentage rate by statutory order, without the need for primary legislation.