Corporation Tax Act 2009 section 1066

Expenditure on sub-contracted R&D undertaken in-house

Section 1066 identifies which expenditure qualifies for relief when a company carries out sub-contracted research and development work itself, rather than passing it on to another party.

• Where a company is sub-contracted to perform R&D, this section determines which of its spending qualifies for relief
• The term "in-house" means R&D that the company directly undertakes itself, rather than further sub-contracting the work
• Qualifying expenditure must relate to the R&D activities the company has been sub-contracted to carry out
• Capital expenditure is automatically excluded from relief under separate rules in Part 3 of the Act dealing with trading income