Corporation Tax Act 2009 section 104G

Subsidised qualifying expenditure on in-house direct R&D

Section 104G defines what counts as "subsidised qualifying expenditure on in-house direct research and development" for SME companies claiming R&D tax relief.

• The expenditure must be subsidised — meaning it has been funded or supported by a grant, subsidy or other external contribution
• The expenditure must fall within specific qualifying cost categories: staffing costs, software or consumable items, externally provided workers, or relevant payments to clinical trial subjects
• The expenditure must relate to relevant research and development that the company carries out itself (i.e. in-house), rather than work it has outsourced to a third party
• The R&D activity must not have been contracted out to the company by another person — the company must be undertaking the R&D on its own behalf