Corporation Tax Act 2009 section 1103

Entitlement to and payment of tax credit

Section 1103 allows a small or medium-sized enterprise (SME) to claim a research and development (R&D) tax credit, and confirms that partial claims are permitted.

• An SME that has a surrenderable loss arising from qualifying R&D expenditure may claim an R&D tax credit from HMRC.
• The company does not have to surrender the full amount of its available loss — it may choose to claim a tax credit on only part of that loss if it wishes.
• On receiving a valid claim, HMRC will pay the company the amount of the R&D tax credit due.
• The tax credit is a cash payment made to the company, which is particularly valuable where the company is loss-making and cannot otherwise benefit from corporation tax relief.