# Corporation Tax Act 2009, Section 1042I: Redemption of value of expenditure credit

Extent: E+W+S+N.I.

If a company is entitled to, and claims, an R&D expenditure credit for an accounting period, the credit is to be dealt with as follows.
Step 1
The amount of the credit is to be applied in discharging any liability of the company to pay corporation tax for the accounting period.
Step 2
If there is a notional tax deduction (see section 1042K), it is to be applied to any amount remaining after step 1.
Step 3
If the amount remaining after step 2 exceeds the cap by reference to the company’s PAYE and NIC liabilities for the accounting period (see section 1112B), the excess is to be deducted.
Step 4
Any amount remaining after step 3 is to be applied in discharging any liability of the company to pay corporation tax for any other accounting period.
Step 5
If the company is a member of a group, it may surrender the whole or part of any amount remaining after step 4 to any other member of the group (as to which see section 1042N).
Step 6
Any amount remaining after step 5 is to be applied in discharging any other liability of the company to pay a sum to the Commissioners for His Majesty’s Revenue and Customs—
(a)under or by virtue of an enactment, or
(b)under an agreement made in connection with any person’s liability to make a payment to the Commissioners under or by virtue of an enactment.
Step 7
Any amount remaining after step 6 is (subject to sections 1112F and 1112H) to be paid to the company by an officer of Revenue and Customs.

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Source: https://www.legislation.gov.uk/ukpga/2009/4/section/1042I (the official version)
Page: https://openlegislation.uk/corporation-tax-act-2009/section-1042I
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.