Corporation Tax Act 2009 section 1216CG

Amount of additional deduction

Section 1216CG sets out how to calculate the amount of the additional deduction available to a company carrying on a separate programme trade, both for the first period of account and for subsequent periods.

• In the first period of account, the additional deduction equals E, being the lower of UK expenditure and 80% of total qualifying expenditure.
• In subsequent periods, the additional deduction is E minus P, where E is recalculated on a cumulative basis and P is the total of all additional deductions already given in earlier periods.
• The cumulative approach ensures the relief builds up over time but is always limited to the lower of cumulative UK expenditure and 80% of cumulative qualifying expenditure, less what has already been claimed.
• HM Treasury has the power to amend these rules by regulations.