Research & Development expenditure
HMRC has, at long last, published a list of overseas bodies to which UK companies can sub-contract research and development work and still secure corporation tax relief.
The general rules for such tax relief require companies to undertake the research and development work themselves. However sub-contracted work will also qualify but only if the payments are made to a ‘qualifying company’.
The list, published this month, is deemed to have been in place since 1 April 2002. The qualifying bodies include universities and research bodies located in the USA, Netherlands, Germany, New Zealand and Canada.
The tax relief is only available for qualifying expenditure incurred on Research and Development – as defined in what is now Part 13 of the Corporation Tax Act 2009.