Annex 1: Minor Changes in the Law Change 77: Additional relief for research and development: applies for corporation tax only: sections 1044, 1045, 1063, 1068, 1074, 1087, 1092 and 1149 Research and development
Schedule 20 to FA 2000 and Schedules 12 and 13 to FA 2002 apply only to companies. See the respective paragraphs 1(1) of each Schedule. The source legislation does not say that the relief given by those Schedules is restricted to a company liable to corporation tax. This leaves open the possibility that the reliefs are available to a company liable to income tax. Such a company would carry on a trade in the United Kingdom other than through a permanent establishment in the United Kingdom.
It is most unlikely that such a company would meet the qualifying conditions for relief but there are other more direct indicators that the reliefs are available only to companies liable to corporation tax.
First, the legislation is drafted in terms of “accounting periods” and that is a term that is defined only for corporation tax. See paragraph 1(1) of each Schedule and section 12 of ICTA.
Second, Parts 9A, 9BA and 9C of Schedule 18 to FA 1998 provide that claims to each relief must be made in the company tax return; that is, the company’s return of its corporation tax liability. There is no equivalent provision for income tax.
Third, paragraph 19 of Schedule 20 to FA 2000 and paragraph 19 of Schedule 13 to FA 2002 restrict the carrying forward of a loss that has been surrendered in return for the payment of a tax credit. There is no equivalent provision for income tax.
Schedule 20 to FA 2000 and Schedules 12 and 13 to FA 2002 are rewritten in Part 13 of this Act (additional relief for expenditure on research and development) and repealed by Schedule 1. Section 1044(1), and other sections in Part 13, provide that the relief applies only for corporation tax.