Section 1053A | Qualifying expenditure: activity as contractor for irrelievable client

(1)Expenditure of a company is qualifying Chapter 2 expenditure if it meets conditions A, B and C in this section.

(2)Condition A is that the expenditure is attributable to relevant research and development contracted out to the company (see section 1133).

(3)Condition B is that subsection (4) is satisfied by each person by whom the research and development is contracted out to the company.

(4)A person satisfies this subsection if—

(a)the person is an ineligible company (see section 1142), or

(b)the person is not, in relation to the contracting out of the research and development by that person, acting in the course of a trade, profession or vocation within the charge to tax.

(5)Condition C is that the expenditure would, but for the fact that the research and development is contracted out to the company, be qualifying Chapter 2 expenditure by virtue of section 1052 or 1053.