(1)This section applies if an insurance company—
(a)carries on life assurance business in an accounting period, and
(b)is a small or medium-sized enterprise in the period.
(2)For the purposes of Chapters 2 to 5 the company is to be treated as if it were not such an enterprise in the period.
(3)Accordingly the company is to be treated as a large company for the purposes of Chapter 5.
(1)This section applies if—
(a)a company (“A”) incurs expenditure on making a payment to another company (“B”) in respect of activities contracted out by A to B,
(b)the activities would, if carried out by A, be research and development of A (taken together with A’s other activities), and
(c)A and B are members of the same group at the time the payment is made.
(2)If the activities are undertaken by B itself, they are to be treated for the purposes of Chapters 3 and 5 (so far as it would not otherwise be the case) as research and development undertaken by B itself.
(3)If B makes a payment to a third party (“C”), any of the activities—
(a)contracted out by B to C, and
(b)undertaken by C itself,
are to be treated for the purposes of Chapters 3 and 5 (so far as it would not otherwise be the case) as research and development contracted out by B to C.
(4)For the purposes of this section A and B are members of the same group if they are members of the same group of companies for the purposes of Chapter 4 of Part 10 of ICTA (group relief).
(1)This section applies if a company receives a payment (“the refund”) refunding the whole or any part of expenditure—
(a)to which subsection (2) applies, and
(b)in respect of which the company obtains relief under Chapter 3, 4 or 5.
(2)This subsection applies to—
(a)qualifying Chapter 3 expenditure to which section 1067 applies (expenditure on sub-contracted R&D not undertaken in-house),
(b)qualifying Chapter 4 expenditure (subsidised expenditure on R&D),
(c)capped R&D expenditure, and
(d)qualifying Chapter 5 expenditure which is—
(i)qualifying expenditure on contracted out research and development under section 1078, or
(ii)qualifying expenditure on contributions to independent research and development under section 1079.
(3)30% of the refund is to be treated as income of the company chargeable to tax under Chapter 2 of Part 3 for the accounting period in which the refund is made.
(4)But subsection (3) does not apply if, because of section 1080(4) (gross roll-up business), the relief obtained in respect of the expenditure concerned is an additional deduction in calculating for corporation tax purposes the profits of gross roll-up business of the company.
(5)In that case 30% of the refund is to be treated as income which is—
(a)referable to the gross roll-up business, and
(b)chargeable, for the accounting period in which the refund is made, under the charge to corporation tax on income.
(1)To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it is to be disregarded for the purposes mentioned in subsection (2).
(2)Those purposes are—
(a)determining for an accounting period relief to which a company is entitled under Chapters 2 to 5, and
(b)determining for an accounting period R&D tax credits to which a company is entitled under Chapter 2.
(3)Arrangements are entered into wholly or mainly for a “disqualifying purpose” if their main object, or one of their main objects, is to enable a company to obtain—
(a)relief under Chapters 2 to 5 to which it would not otherwise be entitled,
(b)relief under Chapters 2 to 5 of a greater amount than that to which it would otherwise be entitled,
(c)an R&D tax credit under Chapter 2 to which it would not otherwise be entitled, or
(d)an R&D tax credit under Chapter 2 of a greater amount than that to which it would otherwise be entitled.
(4)In this section “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.