Corporation Tax Act 2009 section 104S

Restrictions on payment of R&D expenditure credit

Section 104S sets out the circumstances in which payment of an R&D expenditure credit may be restricted or withheld, including where the company is not a going concern, has unpaid PAYE or NIC liabilities, or is subject to an HMRC enquiry into its tax return.

• A company must be a going concern at or before the deadline for amending its tax return in order to receive payment of an R&D expenditure credit; otherwise the payable amount is extinguished.
• If the company subsequently becomes a going concern within the amendment deadline, entitlement to the payment is restored and the credit may be paid.
• Where HMRC has opened an enquiry into the relevant tax return, an officer may make a provisional payment of the credit pending completion of the enquiry.
• No payment of the credit will be made if the company has outstanding PAYE or National Insurance contributions liabilities for the accounting period in question.