CIRD87500 - R&D tax reliefs: large company scheme: refunds of contributions to independent research and subcontract payments

FA02/SCH12/PARA15

Where:

• relief has been given in respect of a contribution to independent R&D ( CIRD82200), or qualifying subcontract payments ( CIRD84200), and
• the payment is wholly or partly refunded,

the refund is income of the accounting period in which the refund is made.

An additional 25% of the refund is also income in the accounting period in which the refund is made.

The refund (including the extra 25%) is normally income within Case I of Schedule D.

An exception is when the refund is made to an insurance company that has obtained relief as a deduction in calculating the profits of a part of its life assurance business. Then the refund is income referable to that part of the life assurance business that is chargeable to tax under Case VI of Schedule D for the accounting period in which the refund is made.