Corporation Tax Act 2009 section 1112B

Cap by reference to PAYE and NIC liabilities

Section 1112B sets out how to calculate the cap on R&D relief payable credits by reference to a company's PAYE and national insurance contributions liabilities for an accounting period.

• The cap equals £20,000 plus three times the company's relevant PAYE and NIC liabilities for payment periods ending in the accounting period.
• If the accounting period is shorter than 12 months, the £20,000 element is proportionately reduced.
• Where a company claims R&D relief under both Chapter 1A (the merged scheme expenditure credit) and Chapter 2 (SME R&D tax credits) for the same period, the cap for the Chapter 1A credit is reduced by any R&D tax credit obtained under Chapter 2.
• The Treasury has power to change the £20,000 amount and the multiplier of three by regulations.