Income Tax Act 2007 section 331A

Meaning of "knowledge-intensive company"

Section 331A defines what qualifies as a "knowledge-intensive company" for the purposes of the Venture Capital Trusts regime, setting out the specific conditions relating to research and development spending, innovation activities, and skilled workforce that a company must satisfy.

• A company must meet at least one of two operating costs conditions (15% of R&D spend in one year, or 10% in each of three years) and at least one of the innovation condition or the skilled employee condition
• The innovation condition requires the company to be actively creating intellectual property that is expected to form the greater part of its business within 10 years
• The skilled employee condition requires at least 20% of full-time equivalent employees to hold a relevant higher education qualification (master's level or above) and be directly engaged in R&D or innovation
• Where the company is a parent company, the operating costs, innovation activities, and employee numbers of qualifying subsidiaries are included in the assessment on a group-wide basis