Corporation Tax Act 2009 section 1126

Software, data licences, cloud computing services or consumable items: attributable expenditure

Section 1126 sets out the rules for determining when spending on software, data licences, cloud computing services or consumable items qualifies as attributable to relevant research and development.

• Expenditure on software, data licences, cloud computing services or consumable items counts as attributable to R&D only if those items are employed directly in the relevant research and development activities.
• Where such items are only partly used directly in R&D, only the appropriate proportion of the expenditure is treated as attributable to the research and development.
• Items used in support services such as secretarial or administrative functions are not treated as directly employed in the underlying activities those services support — their cost does not qualify as R&D expenditure merely because the services they support relate to R&D.
• This section is subject to the additional rules in sections 1126A and 1126B, which contain special rules and further provisions about attributable expenditure.