Corporation Tax Act 2010 section 357PE

Restriction on losses carried forward where tax credit claimed

Section 357PE sets out how losses available to carry forward are restricted when a small or medium-sized enterprise (SME) that is a Northern Ireland company surrenders trading losses in order to claim a payable R&D tax credit.

• The standard CTA 2009 rules on restricting losses carried forward after claiming an R&D tax credit do not apply to Northern Ireland companies; this section applies instead.
• If the company has a Northern Ireland loss in the period, that loss is reduced by the amount of Northern Ireland loss surrendered for the R&D tax credit.
• If the company has a mainstream loss in the period, that loss is reduced by the amount of mainstream loss surrendered for the R&D tax credit.
• The surrendered amounts are defined by reference to the Northern Ireland and mainstream Chapter 2 surrenderable losses in respect of which the R&D tax credit is claimed.