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.

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

(2A)Condition B is that the company—

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

(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.

(3)Repealed

(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.

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

(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)....

(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.

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

(9)Repealed

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