Corporation Tax Act 2009 section 1142D

General rule against payments of credit to nominees

Section 1142D prevents HMRC from paying R&D expenditure credits or R&D tax credits to anyone other than the company itself, with limited exceptions.

• HMRC must pay R&D credits directly to the company that earned them, not to a third party
• This rule applies even if the company instructs or requests that payment be made to someone else
• An exception exists where the company asks for payment to be made to a connected person (such as a group company)
• HMRC may also pay a third party if exceptional circumstances make direct payment to the company impracticable or inconvenient