Corporation Tax Act 2009 section 1126ZA

Attributable expenditure: special rules for data and cloud computing

Section 1126ZA sets out the circumstances in which expenditure on data licences or cloud computing services cannot be treated as attributable to relevant research and development for R&D tax relief purposes.

• Expenditure on data licences or cloud computing services is excluded from R&D relief where the licence or service grants rights to sell the underlying data
• Expenditure is also excluded where the licence or service grants rights to publish, share, or communicate the data to third parties, unless such communication is reasonably necessary for or incidental to the R&D itself
• Expenditure on data licences or cloud computing services that is attributable to a qualifying indirect activity (as defined in paragraph 31 of the HMRC Guidelines on the Meaning of Research and Development for Tax Purposes) is similarly excluded
• The exclusions apply to rights obtained by any relevant person connected with the R&D expenditure, not just the company claiming relief