Corporation Tax Act 2009 section 1177

"Subsidised expenditure"

Section 1177 defines what counts as "subsidised expenditure" for the purposes of the research and development tax relief rules in Part 13 of the Act.

• Expenditure is treated as subsidised to the extent a grant or subsidy is obtained in respect of it
• Expenditure is also subsidised if it is met directly or indirectly by a person other than the company itself
• Where a grant, subsidy or payment is not allocated to specific expenditure, it must be apportioned on a just and reasonable basis
• The subsidised portion of expenditure may be restricted or excluded from qualifying for R&D tax relief