Section 357BLA | The R&D fraction

From legislation.gov.uk

(1)The R&D fraction for the sub-stream is the lesser of 1 and—

Formula

\frac{(D + S1) \times 1.3}{D + S1 + S2 + A}

where—

D is the company's qualifying expenditure on relevant R&D undertaken in-house (see section 357BLB),

S1 is the company's qualifying expenditure on relevant R&D sub-contracted to unconnected persons (see section 357BLC),

S2 is the company's qualifying expenditure on relevant R&D sub-contracted to connected persons (see section 357BLD), and

A is the company's qualifying expenditure on the acquisition of relevant qualifying IP rights (see section 357BLE).

(2)This section is subject to section 357BLH (R&D fraction: increase for exceptional circumstances).