CIRD98200 - R&D tax relief: legislative structure and time line: large company scheme

FA02/SCH12

The large company scheme is introduced in FA02/S53 and FA02/SCH12. It provides a different level of enhanced deduction for R&D expenditure for large companies, and does not provide for payable tax credits. It uses the same definition of R&D, and broadly the same definitions of qualifying expenditure, although there are different rules about subcontracted expenditure, subsidised expenditure, and contributions to qualifying bodies or independent research.

The large company scheme is not a State Aid. Consequently, changes to the large companies scheme can be made without reference to the EC, whereas material changes to the SME scheme have to be approved by the EC. This difference in approach has resulted in a number of different start dates applying to changes to the large company and SME schemes. These differences are summarised in the time line at CIRD98900.

Details of the large company scheme are at CIRD85000.

Extension of large company scheme to small companies

The large company scheme includes provisions to cover SMEs that were unable to claim under the rules of the SME scheme in respect of work subcontracted to SMEs by large companies ( CIRD89500) - FA02/SCH12/PARA7.