Corporation Tax Act 2009 section 1074

Additional deduction in calculating profits of trade

Section 1074 allows large companies to claim an additional tax deduction for qualifying research and development expenditure incurred within their trade.

• Large companies can claim an enhanced deduction for qualifying R&D expenditure that is already deductible in calculating their trading profits.
• The additional deduction is 30% of the qualifying R&D expenditure, on top of the normal 100% deduction already given.
• Only companies that are liable to corporation tax can claim this relief — it is not available to other types of entity.
• This relief operates separately from the more generous R&D relief available to small or medium-sized enterprises, but follows a similar mechanism of providing an extra deduction above the amount already allowed.