Corporation Tax Act 2009 section 1112J

Chapter 2 relief for Northern Ireland companies

Section 1112J restricts the enhanced R&D tax relief available under Chapter 2 for companies registered in Northern Ireland, by capping the additional benefit above standard Chapter 1A relief at the level permitted under EU de minimis state aid rules as applied through the Windsor Framework.

• Northern Ireland companies (those with a registered office in Northern Ireland) can only claim the extra benefit of Chapter 2 R&D relief over and above Chapter 1A relief to the extent it qualifies as de minimis state aid under the Windsor Framework rules.
• The "additional relief" is defined as the difference between the Chapter 2 relief actually claimed and the relief that would have been available under the standard Chapter 1A regime for the same expenditure.
• An exemption exists for companies that have not traded in goods or been involved in electricity generation, transmission, distribution, supply, wholesale trade or cross-border exchange at any point during the accounting period — provided they notify HMRC in writing that they wish to rely on this exemption.
• These rules apply to claims made on or after 30 October 2024, and replace the previous regulatory framework under the Research and Development (Chapter 2 Relief) Regulations 2024, which are revoked.

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