Section 1042I — Corporation Tax Act 2009: Redemption of value of expenditure credit

Redemption of value of expenditure credit 1042I If a company is entitled to, and claims, an R&D expenditure credit for an accounting period, the credit is to be dealt with as follows. Step 1 The amount of the credit is to be applied in discharging any liability of the company to pay corporation tax for the accounting period. Step 2 If there is a notional tax deduction (see section 1042K ), it is to be applied to any amount remaining after step 1. Step 3 If the amount remaining after step 2 exceeds the cap by reference to the company’s PAYE and NIC liabilities for the accounting period (see section 1112B ), the excess is to be deducted. Step 4 Any amount remaining after step 3 is to be applied in discharging any liability of the company to pay corporation tax for any other accounting period. Step 5 If the company is a member of a group, it may surrender the whole or part of any amount remaining after step 4 to any other member of the group (as to which see section 1042N ). Step 6 Any amount remaining after step 5 is to be applied in discharging any other liability of the company to pay a sum to the Commissioners for His Majesty’s Revenue and Customs— under or by virtue of an enactment, or under an agreement made in connection with any person’s liability to make a payment to the Commissioners under or by virtue of an enactment. Step 7 Any amount remaining after step 6 is (subject to sections 1112F and 1112H ) to be paid to the company by an officer of Revenue and Customs.