Corporation Tax Act 2009 section 1109

Payment of tax credit

Section 1109 explains the circumstances in which HMRC may withhold payment of an R&D tax credit or set it against outstanding corporation tax liabilities.

• Where a company claims an R&D tax credit, HMRC may withhold payment if the company has overdue corporation tax.
• HMRC can set the tax credit against any arrears of corporation tax owed by the company before making any payment.
• The credit is only paid out to the extent it exceeds any outstanding corporation tax liabilities.
• This ensures the Exchequer recovers amounts already owed before releasing new payments to the company.