Corporation Tax Act 2009 section 1052

Qualifying expenditure: in-house R&D

Section 1052 sets out the four conditions that expenditure must satisfy in order to qualify as "Chapter 2 expenditure" for the merged R&D tax relief scheme, where the company carries out the research and development itself (in-house R&D).

• Expenditure must be attributable to relevant R&D that the company undertakes itself — it is not R&D that has been contracted out to the company by someone else
• The expenditure must fall into one of four eligible cost categories: staffing costs, software/data licences/cloud computing/consumable items, externally provided workers, or payments to clinical trial subjects
• The R&D must not have been contracted out to the company — meaning the company is doing the R&D on its own initiative, not as a subcontractor for another party
• The expenditure must not be attributable to an exempt foreign permanent establishment of the company