Corporation Tax Act 2009 section 1130

Election for connected persons treatment

Section 1130 allows unconnected parties involved in staffing arrangements for R&D to jointly elect to be treated as if they were connected persons, thereby increasing the amount of qualifying expenditure on externally provided workers.

• Where a company, staff provider and staff controller are not all connected, they may jointly elect to be treated as connected for the purposes of calculating qualifying R&D expenditure on externally provided workers
• The election applies to all staff provision payments made under the same contract or arrangement, not just individual payments
• The election must be made in writing to HMRC within two years of the end of the company's accounting period in which the contract or arrangement was entered into
• Once made, the election is irrevocable and cannot be withdrawn or amended