Corporation Tax Act 2009 section 1075

R&D threshold

Section 1075 sets out the minimum amount of qualifying research and development expenditure a company must incur in an accounting period in order to claim relief under the large company R&D expenditure credit scheme.

• A company must incur at least £10,000 of qualifying R&D expenditure in an accounting period to claim relief under this chapter.
• Where an accounting period is shorter than 12 months, the £10,000 threshold is reduced proportionately using a prescribed arithmetic formula based on the number of days in the period relative to a full year.
• Pre-trading expenditure that is treated as incurred on the first day of trading (and therefore bunched into the first accounting period) counts towards meeting the threshold.
• The formula for the proportionate reduction is explicitly set out in the legislation to remove any uncertainty about how the calculation should be performed.