Corporation Tax Act 2009 section 1061

Tax credit payment not income of company

Section 1061 confirms that any payment a company receives as an R&D tax credit is not treated as taxable income.

• When a company receives a cash payment as an R&D tax credit, that payment is not treated as income of the company
• This exclusion applies for all tax purposes, not just corporation tax
• The effect is that the R&D tax credit payment does not increase the company's taxable profits
• This ensures companies receive the full benefit of the R&D tax credit without it being clawed back through taxation of the payment itself