Quick answer: A qualifying body is a university, charity, health service body or other organisation listed in section 1142 CTA 2009. Payments to a qualifying body for R&D work carried out on a company’s behalf are treated as qualifying subcontractor expenditure, with 65% of the payment eligible under the standard rule.
What is a qualifying body?
A qualifying body, for R&D tax relief purposes, is an organisation listed in section 1142 of the Corporation Tax Act 2009. The list includes universities, charities, scientific research associations, health service bodies and specified public bodies. Payments by a company to a qualifying body for R&D work carried out on its behalf are treated as qualifying subcontractor expenditure, with 65% of the payment eligible under the standard rule. The UK-workforce rules introduced under the merged scheme contain specific carve-outs for payments to qualifying bodies.
How does HMRC define a qualifying body?
HMRC guidance on qualifying bodies is at CIRD81800 and CIRD84200 of the CIRD Manual. The statutory list is at section 1142 of the Corporation Tax Act 2009. The Secretary of State may add further organisations by order.
What does a qualifying-body payment look like in practice?
A medical device company contracts with a UK university to carry out a series of biocompatibility studies, paying the institution £120,000 during the accounting period. The university is a qualifying body, so 65% of the payment, or £78,000, is included as qualifying subcontractor expenditure in the R&D claim. The free eligibility calculator can help estimate how payments to a qualifying body affect an overall claim.
Related terms
Frequently Asked Questions
The list, set out in section 1142 of the Corporation Tax Act 2009, includes universities, charities, scientific research associations, health service bodies and specified public bodies. The Secretary of State may add further organisations by order.
65% of the payment is treated as qualifying subcontractor expenditure under the standard rule, in the same way as payments to other subcontractors.
Yes. The UK-workforce rules introduced under the merged scheme contain specific carve-outs for payments to qualifying bodies, which can differ from the treatment of ordinary commercial subcontractors.
Generally yes, provided the university itself carries out the R&D work as a subcontractor to the claimant company. A payment to a university for something other than R&D services, such as a straightforward commercial licence fee or a donation, is not a qualifying-body R&D payment.
No. The qualifying-body list in section 1142 Corporation Tax Act 2009 covers the organisations a company can subcontract R&D to under the special rules; a claimant company carrying out its own R&D is not itself a qualifying body for the purposes of its own claim.
The 65% rate itself is unchanged, but the merged scheme's UK-workforce condition, which generally requires subcontracted R&D to be carried out in the UK, applies to qualifying-body subcontracting in the same way it applies to ordinary commercial subcontractors, subject to the same narrow overseas exception.