|
| |
| |
(i) the whole of the staff provision payment has been | |
brought into account in determining the staff | |
provider’s profit or loss for a relevant period, and | |
(ii) all of the staff provider’s relevant expenditure has | |
been so brought into account, | 5 |
the whole of the payment (up to the amount of the staff provider’s | |
relevant expenditure) is qualifying expenditure on externally | |
provided workers. | |
(2) In sub-paragraph (1)— | |
(a) references to the “relevant expenditure” of the staff | 10 |
provider are to expenditure that— | |
(i) is incurred by the staff provider in providing for | |
the company the externally provided workers to | |
which the staff provision payment relates, | |
(ii) is not of a capital nature, and | 15 |
(iii) is incurred on staffing costs or agency workers’ | |
remuneration; | |
(b) a “relevant period” means a period— | |
(i) for which accounts are drawn up for the staff | |
provider, and | 20 |
(ii) that ends not more than twelve months after the | |
end of the company’s period of account in which | |
the staff provision payment is, in accordance with | |
generally accepted accounting practice, brought | |
into account in determining the company’s profit | 25 |
or loss. | |
(3) Paragraph 5 (staffing costs) applies for the purposes of | |
determining whether the staff provider’s expenditure meets the | |
requirements of sub-paragraph (2)(a)(iii) so far as relating to | |
staffing costs. | 30 |
For this purpose the references in that paragraph to a company | |
shall be read as references to the staff provider. | |
(4) For the purposes of this Schedule “agency workers’ | |
remuneration”, in the case of any person who is an externally | |
provided worker in relation to the company, means remuneration | 35 |
receivable by the worker under or in consequence of the contract | |
mentioned in paragraph 8B(f)— | |
(a) that does not constitute employment income of the worker | |
apart from Chapter 7 of Part 2 of the Income Tax (Earnings | |
and Pensions) Act 2003 (c. 1) (application of provisions to | 40 |
agency workers), and | |
(b) that is not, apart from section 134 of the Taxes Act 1988 | |
(workers supplied by agencies), chargeable to income tax | |
under Schedule E. | |
(5) Any apportionment of expenditure of the company or the staff | 45 |
provider necessary for the purposes of this paragraph shall be | |
made on a just and reasonable basis. | |
| |
| |
|
| |
| |
Election for connected persons treatment | |
8D (1) The company and the staff provider may in any case jointly elect | |
that paragraph 8C shall apply to the staff provision payments | |
made by the company to the staff provider. | |
(2) Any such election must be made in relation to all staff provision | 5 |
payments paid under the same contract or arrangement. | |
(3) The election must be made by notice in writing given to the Inland | |
Revenue. | |
(4) The notice must be given before the end of the period of two years | |
beginning with the end of the company’s accounting period in | 10 |
which the contract or other arrangement is entered into. | |
(5) An election under this paragraph, once made, is irrevocable. | |
Treatment of staff provision payment in other cases | |
8E Where— | |
(a) the company makes a staff provision payment, | 15 |
(b) the company and the staff provider are not connected | |
persons, and | |
(c) no election is made under paragraph 8D, | |
65% of the amount of the staff provision payment is treated as | |
qualifying expenditure on externally provided workers.”. | 20 |
Qualifying expenditure on sub-contracted R&D: externally provided workers | |
7 (1) Paragraph 10 (treatment of qualifying expenditure on sub-contracted | |
research and development where company and sub-contractor are | |
connected persons) is amended as follows. | |
(2) In sub-paragraph (2)(a) (relevant expenditure of sub-contractor) in sub- | 25 |
paragraph (iii) after “on consumable stores” insert “or is qualifying | |
expenditure on externally provided workers”. | |
(3) For sub-paragraph (3) (which applies paragraphs 5 and 8) substitute— | |
“(3) For the purpose of determining whether the sub-contractor’s | |
expenditure meets the requirements of sub-paragraph (2)(a)(iii) | 30 |
and (iv), the following provisions apply— | |
(a) paragraph 5 (staffing costs), | |
(b) paragraph 8 (subsidised expenditure), and | |
(c) paragraphs 8A to 8E (qualifying expenditure on externally | |
provided workers), | 35 |
but for that purpose the references in those paragraphs to a | |
company shall be read as references to the sub-contractor.”. | |
| |
| |
|
| |
| |
Part 2 | |
Large companies: Part 1 of Schedule 12 to Finance Act 2002 | |
Introductory | |
8 Part 1 of Schedule 12 to the Finance Act 2002 (c. 23) (entitlement to R&D | |
relief: large companies) is amended in accordance with the following | 5 |
provisions of this Part of this Schedule. | |
Required minimum aggregate expenditure: reduction from £25,000 to £10,000 | |
9 (1) Paragraph 1 (entitlement to relief under Part 1 of the Schedule) is amended | |
as follows. | |
(2) In sub-paragraph (1)(b) (requirement for minimum qualifying R&D | 10 |
expenditure of £25,000 or time apportioned part of that amount) in sub- | |
paragraphs (i) and (ii) for “£25,000” substitute “£10,000”. | |
Qualifying expenditure on externally provided workers | |
10 In paragraph 4 (qualifying expenditure on direct research and development) | |
for sub-paragraph (3) (the second condition, that the expenditure is incurred | 15 |
on staffing costs or consumable stores) substitute— | |
“(3) The second condition is that the expenditure— | |
(a) is incurred on staffing costs, | |
(b) is incurred on consumable stores, or | |
(c) is qualifying expenditure on externally provided | 20 |
workers.”. | |
Part 3 | |
Work sub-contracted to SMEs: Part 2 of Schedule 12 to Finance Act 2002 | |
Introductory | |
11 Part 2 of Schedule 12 to the Finance Act 2002 (entitlement to relief for R&D | 25 |
expenditure: work sub-contracted to small or medium-sized enterprise) is | |
amended in accordance with the following provisions of this Part of this | |
Schedule. | |
Required minimum aggregate expenditure: reduction from £25,000 to £10,000 | |
12 (1) Paragraph 7 (entitlement to relief under Part 2 of the Schedule) is amended | 30 |
as follows. | |
(2) In sub-paragraph (1)(b) (requirement for minimum R&D expenditure of | |
£25,000 or time apportioned part of that amount) in sub-paragraphs (i) and | |
(ii) for “£25,000” substitute “£10,000”. | |
Required minimum aggregate expenditure: inclusion of new class of expenditure | 35 |
13 (1) Paragraph 7 is also amended as follows. | |
(2) In sub-paragraph (2) (meaning of “aggregate R&D expenditure”) omit the | |
| |
| |
|
| |
| |
word “and” immediately preceding paragraph (b) and at the end of that | |
paragraph add “, and | |
(c) its qualifying additional SME expenditure (see paragraph | |
10B).”. | |
R&D directly undertaken by SME: qualifying expenditure on externally provided workers | 5 |
14 In paragraph 9 (expenditure on research and development directly | |
undertaken by SME) for sub-paragraph (2) (the second condition, that the | |
expenditure must be incurred on staffing costs or consumable stores) | |
substitute— | |
“(2) The second condition is that the expenditure— | 10 |
(a) is incurred on staffing costs, | |
(b) is incurred on consumable stores, or | |
(c) is qualifying expenditure on externally provided | |
workers.”. | |
Part 4 | 15 |
Entitlement of SME to certain relief available to large companies | |
Insertion of Part 2A of Schedule 12 to the Finance Act 2002 | |
15 After Part 2 of Schedule 12 to the Finance Act 2002 (c. 23) (entitlement to | |
relief for R&D expenditure: work sub-contracted to small or medium-sized | |
enterprise) insert the following Part— | 20 |
“Part 2A | |
Entitlement of SME to additional relief available to large companies | |
Entitlement to relief under this Part | |
10A (1) A company (“the SME”) is entitled to tax relief under this Part for | |
an accounting period if— | 25 |
(a) it qualifies as a small or medium-sized enterprise in that | |
period, and | |
(b) its aggregate R&D expenditure for that period is not less | |
than— | |
(i) £10,000, if the accounting period is a period of 12 | 30 |
months, or | |
(ii) such amount as bears to £10,000 the same | |
proportion as the accounting period bears to 12 | |
months. | |
(2) Sub-paragraphs (2) and (3) of paragraph 7 (meaning of “aggregate | 35 |
R&D expenditure” and “for an accounting period”) apply for the | |
purposes of this paragraph as they apply for the purposes of that | |
paragraph. | |
(3) Any relief to which a company is entitled under this Part for an | |
accounting period is in addition to any relief to which it may be | 40 |
entitled under— | |
| |
| |
|
| |
| |
(a) Schedule 20 to the Finance Act 2000, or | |
(b) Part 2 of this Schedule. | |
Qualifying additional SME expenditure | |
10B For the purposes of this Schedule, the SME’s “qualifying | |
additional SME expenditure” is any expenditure which— | 5 |
(a) had the SME been a large company throughout the | |
accounting period in question, would have been | |
qualifying R&D expenditure of that company (see | |
paragraph 3), but | |
(b) is not qualifying R&D expenditure for the purposes of | 10 |
Schedule 20 to the Finance Act 2000 (see paragraph 3 of | |
that Schedule) in the case of the SME by reason only of | |
paragraph 3(7) or 10(2)(a)(iv) of that Schedule (subsidised | |
expenditure, within the meaning given by paragraph 8 of | |
that Schedule); and | 15 |
(c) is not qualifying sub-contracted R&D expenditure for the | |
purposes of this Schedule (see paragraph 8) in the case of | |
the SME.”. | |
Part 5 | |
Supplementary: amendments to Parts 3 to 6 of Schedule 12 to Finance Act 2002 | 20 |
Introductory | |
16 Parts 3 to 6 of Schedule 12 to the Finance Act 2002 (c. 23) are amended in | |
accordance with the following provisions of this Part of this Schedule. | |
Deduction in computing profits of trade | |
17 (1) Paragraph 11 is amended as follows. | 25 |
(2) In sub-paragraph (1) (application of paragraph) for “Part 1 or 2” substitute | |
“Part 1, 2 or 2A”. | |
(3) In sub-paragraph (3) (meaning of “qualifying expenditure”) omit the word | |
“and” immediately preceding paragraph (b) and at the end of that | |
paragraph insert “, and | 30 |
(c) in the case of relief under Part 2A, qualifying additional SME | |
expenditure (see paragraph 10B).”. | |
Refunds of contributions to independent research and development | |
18 In paragraph 15(1) (refunds of certain payments) omit the word “or” | |
immediately preceding paragraph (c) and at the end of that paragraph insert | 35 |
“, or | |
(d) any expenditure which is qualifying additional SME | |
expenditure,”. | |
| |
| |
|
| |
| |
Meaning of “qualifying expenditure on externally provided workers” | |
19 (1) Paragraph 17 (which applies certain definitions from Schedule 20 to the | |
Finance Act 2000 (c. 17)) is amended as follows. | |
(2) Omit the word “and” immediately preceding paragraph (c). | |
(3) At the end of paragraph (c) add “; and | 5 |
(d) paragraphs 8A to 8E (qualifying expenditure on externally | |
provided workers).”. | |
(4) The heading to the paragraph accordingly becomes— | |
“Meaning of “relevant research and development”, “staffing costs”, “consumable | |
stores” and “qualifying expenditure on externally provided workers””. | 10 |
Part 6 | |
Expenditure on vaccine research etc: Schedule 13 to Finance Act 2002 | |
Introductory | |
20 Schedule 13 to the Finance Act 2002 (c. 23) (tax relief for expenditure on | |
vaccine research etc) is amended in accordance with the following | 15 |
provisions of this Part of this Schedule. | |
Reduction of required qualifying expenditure from £25,000 to £10,000 | |
21 (1) Paragraph 1 (entitlement to relief under the Schedule) is amended as | |
follows. | |
(2) In sub-paragraph (1) (requirement for minimum qualifying expenditure of | 20 |
£25,000 or time apportioned part of that amount) in paragraphs (a) and (b) | |
for “£25,000” substitute “£10,000”. | |
Direct research and development: qualifying expenditure on externally provided workers | |
22 In paragraph 3 (qualifying expenditure on direct research and development) | |
for sub-paragraph (5) (the fourth condition, that the expenditure is incurred | 25 |
on staffing costs or consumable stores) substitute— | |
“(5) The fourth condition is that the expenditure— | |
(a) is incurred on staffing costs, | |
(b) is incurred on consumable stores, or | |
(c) is qualifying expenditure on externally provided | 30 |
workers.”. | |
Meaning of “qualifying expenditure on externally provided workers” | |
23 (1) Paragraph 5(3) (which applies certain definitions in Schedule 20 to the | |
Finance Act 2000) is amended as follows. | |
(2) Omit the word “and” immediately preceding paragraph (d). | 35 |
(3) In paragraph (d), for “(subsidised expenditure),” substitute “(subsidised | |
expenditure); and”. | |
| |
| |
|
| |
| |
(4) After paragraph (d) insert the following paragraph— | |
“(e) paragraphs 8A to 8E (qualifying expenditure on externally | |
provided workers),”. | |
(5) The heading to paragraph 5 accordingly becomes— | |
“Meaning of “relevant R&D”, “small or medium-sized enterprise”, “staffing | 5 |
costs”, “consumable stores”, “subsidised” and “qualifying expenditure on | |
externally provided workers”. | |
Relevant expenditure of sub-contractor: qualifying expenditure on externally provided workers | |
24 In paragraph 9 (relevant expenditure of sub-contractor) for sub-paragraph | |
(3) (the second condition, that the expenditure must be incurred on staffing | 10 |
costs or consumable stores) substitute— | |
“(3) The second condition is that the expenditure— | |
(a) is incurred on staffing costs, | |
(b) is incurred on consumable stores, or | |
(c) is qualifying expenditure on externally provided workers. | 15 |
In applying for the purposes of this sub-paragraph (by virtue of | |
paragraph 5 above)— | |
(a) paragraph 5 of Schedule 20 to the Finance Act 2000 | |
(meaning of “staffing costs”), or | |
(b) paragraphs 8A to 8E of that Schedule (qualifying | 20 |
expenditure on externally provided workers), | |
the references to the company shall be read as references to the | |
sub-contractor.”. | |
Schedule 32 | |
Section 168 | |
Tonnage tax: restrictions on capital allowances for lessors of ships | 25 |
The ring fence: amendments to the provisions about capital allowances and ship leasing | |
1 (1) In Schedule 22 to the Finance Act 2000 (c. 17) (tonnage tax), Part 10 (the ring | |
fence: capital allowances: ship leasing) is amended as follows. | |
(2) Omit the word “finance” from the expression “finance lease” in paragraphs | |
89(1), 90(1), 92(1), 93(1), 94(1), 98(1)(a) and 99(1)(a). | 30 |
(3) At the end of sub-paragraph (1) of paragraph 89 (introduction to Part 10) | |
insert— | |
“This is subject to paragraph 89A (exception for ordinary charters).”. | |
(4) For sub-paragraph (2) of that paragraph substitute— | |
“(2) In this Part of this Schedule “lease” means any arrangements that | 35 |
provide for a ship to be leased or otherwise made available by a | |
person (“the lessor”) to another person (“the lessee”).”. | |
| |
| |
|
