Section 27 of FA 2008 repealed paragraph 12 of Schedule 13 FA
2002 and as a result of this, expenditure incurred by companies on
or after 1 August 2008 on contributions to independent R&D will
no longer attract VRR.
Companies can of course make VRR claims in respect of
expenditure incurred on or before 31 July 2008.
Relief is due if payments are made to:
for the purposes of funding qualifying R&D activity carried
on by the body in question.
The R&D activity must be related to a trade carried on
by the company
CIRD75300. For example, a company that
manufactures vaccine may give a contribution to a charity that is
carrying out research into a new AIDS vaccine. If it does that, the
company may claim VRR on the contribution.
There is a definition of charity in ICTA88/S506 (1) and
scientific research organisation in ICTA88/S508 and those are the
definitions that you should use. The effect of these is to restrict
charities & scientific research organisations to bodies located
in the UK. There is no similar restriction in the case of
universities.
