Corporation Tax Act 2009 section 1050

R&D threshold

Section 1050 sets out the minimum amount of qualifying research and development expenditure a company must incur in an accounting period before it can claim R&D tax relief under this chapter.

• A company must meet a minimum qualifying expenditure threshold in each accounting period to be eligible for R&D tax relief.
• If the accounting period is shorter than 12 months, the threshold is reduced proportionately using a formula based on 365 days.
• Pre-trading expenditure counts towards the threshold — the company is treated as if it were already carrying on a trade for the purpose of determining whether the expenditure would be deductible.
• Qualifying expenditure from different trades or pre-trading activities can be combined to meet the threshold — there is no requirement that it all relates to the same trade.