Corporation Tax Act 2009 section 1101

Qualifying expenditure on in-house direct research and development

Section 1101 defines what counts as "qualifying expenditure on in-house direct research and development" for the purposes of the large company R&D tax relief scheme.

• "In-house direct R&D" means research and development carried out directly by the company itself, rather than being contracted out to a third party.
• To qualify, the expenditure must be attributable to R&D activity that counts as "relevant research and development" in relation to the company.
• The expenditure must fall within one of the recognised categories of qualifying spend defined elsewhere in the legislation (such as staffing costs, software, consumable items, etc.).
• Capital expenditure is automatically excluded — not by this section specifically, but because a separate rule in the Corporation Tax Act 2009 (section 53) already prevents capital items from being deducted as trading expenses.