Companies eligible for R&D tax relief

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

This guidance note provides information on the conditions which must be met by a company for it to claim R&D tax relief. The Qualifying expenditure for R&D tax relief guidance note provides information on the types of expenditure which qualify for relief.

Conditions for the company for R&D relief

See Simon’s Taxes D1.402A.

The company must be within the charge to corporation tax. An overseas permanent establishment (PE) of a UK company can therefore qualify for relief if it is within the charge to corporation tax and is not the subject of a foreign branch exemption election. See the Foreign branch exemption ― overview guidance note for more on the exemption. UK PEs of non-UK companies can also qualify.

The company must be carrying on a trade. A claim for R&D relief failed at this hurdle in L.R. R&D LLP. The LLP acquired rights to exploit transdermal patch technology for the delivery of medications and entered into a framework agreement to subcontract R&D work related to it.

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