Corporation Tax Act 2009 section 104D

Expenditure on sub-contracted R&D undertaken in-house

Section 104D sets out the conditions under which an SME company that has been sub-contracted to carry out research and development can claim R&D expenditure credits for the work it performs in-house.

• This section applies to SME companies that have been contracted by another company to undertake R&D work
• The company must carry out the R&D itself (Condition A), rather than further sub-contracting it
• Qualifying expenditure is limited to staffing costs, software or consumable items, externally provided workers, and relevant payments to clinical trial subjects (Condition B)
• The expenditure must be attributable to relevant research and development in relation to the company (Condition C)