Section 1044 | Additional deduction in calculating profits of trade

(1)A company is entitled to corporation tax relief for an accounting period if it meets each of conditions A to F.^F1

(2)Condition A is that the company is a small or medium-sized enterprise in the period.

(2A)Condition B is that the company—^F2

(a)meets the R&D intensity condition in the period, or^F2

(b)obtained relief under this Chapter for its most recent prior accounting period of 12 months’ duration, having met the R&D intensity condition in that period.^F2

(3)Repealed^F3

(4)Condition C is that the company carries on a trade in the period.

(5)Condition D is that the company has qualifying Chapter 2 expenditure which is allowable as a deduction in calculating for corporation tax purposes the profits of the trade for the period.

(5A)Condition E is that the company makes a loss in the trade in the period.^F4

(5B)Condition F is that the company is not an ineligible company (see section 1142).^F4

(6)For the company to obtain the relief it must make a claim (see Part 9A of Schedule 18 to the FA 1998, and also sections 1045A and 1112F)....^F5F6

(7)The relief is an additional deduction in calculating the profits of the trade for the period. The deduction is, in particular, additional to any given under section 87.^F7

(8)The amount of the additional deduction is 86% of the qualifying Chapter 2 expenditure.^F8

(9)Repealed^F9

(10)For the meaning of “qualifying Chapter 2 expenditure” see section 1051.