Corporation Tax Act 2009 section 1090

Modification of section 1089 for larger SMEs

Section 1090 modifies the additional deduction available under section 1089 for companies classified as "larger SMEs", reducing the enhancement to comply with European Union state aid limits.

• The enhanced deduction available for R&D expenditure under section 1089 is reduced for companies that fall into the "larger SME" category.
• The purpose of this reduction is to ensure the tax relief stays within the limits permitted under European Union rules on state aid.
• The definition of a "larger SME" is provided separately in section 1121 of the Act.
• Transitional provisions mean the "larger SME" restriction does not apply to expenditure incurred before 1 August 2008, preserving the original commencement rules.