Corporation Tax Act 2009 section 1084

Artificially inflated claims for relief or tax credit

Section 1084 prevents companies from claiming R&D relief or R&D tax credits where transactions have been artificially structured to inflate the amount of relief available.

• Transactions carried out mainly for a disqualifying purpose are excluded when calculating R&D relief or R&D tax credits under Chapter 2.
• A disqualifying purpose means the main aim of the transaction is to obtain relief or tax credits the company would not otherwise be entitled to.
• It also covers transactions aimed at securing a greater amount of relief or tax credit than the company would otherwise receive.
• The test focuses on the main purpose of the arrangements, not merely an incidental or secondary purpose.