Corporation Tax Act 2009 section 1093

Modification of section 1092 for larger SMEs

Section 1093 modifies the additional deduction available under section 1092 for companies that qualify as "larger SMEs", in order to keep the tax relief within European Union state aid limits.

• This section applies specifically to "larger SMEs" — a defined category of company set out in section 1121 of the Act.
• For these larger SMEs, the enhanced deduction for research and development expenditure available under section 1092 is reduced to comply with EU state aid rules.
• The modification limits the amount of additional deduction that a larger SME can claim, compared to the standard treatment available to smaller SMEs.
• The restriction ensures that the overall level of tax relief provided through the R&D expenditure credit regime does not breach the permitted ceiling for government subsidies under EU regulations.