The Research and Development (Qualifying Bodies) (Tax) (Amendment and Further Prescribed Bodies) Order, SI 2022/690, removes the Lomonosov Moscow State University from the list of qualifying bodies, payments to which are eligible for research and development (R&D) tax credits and reliefs.
This means that companies making payments to the Lomonosov Moscow State University for the purposes of R&D will no longer be able to receive R&D tax credits or relief. This is part of the UK government’s Russia sanctions policy.
Broadly, tax credits and reliefs are available for expenditure incurred by companies on independent R&D where that expenditure meets certain conditions. One of those conditions is that the expenditure is incurred in making payments to an individual, a firm or a ‘qualifying body’ (e.g. a university or charity). While some institutions are covered by UK legislation, the Treasury also has the power to prescribe other organisations (payments to which otherwise would not qualify) as ‘qualifying bodies’. The list of other qualifying bodies is set out in the Schedule to the Research and Development (Qualifying Bodies) (Tax) Order, SI 2018/217.
This new Order also sets out an additional list of prescribed bodies, meaning that R&D tax credits and reliefs will be available for payments made to those bodies, where the qualifying expenditure is incurred on or after the specified dates (all of which are retrospective). This list is in addition to the list set out in the schedule to SI 2018/217. The new Order comes into force on 13 July 2022.
The Research and Development (Qualifying Bodies) (Tax) (Amendment and Further Prescribed Bodies) Order, SI 2022/690, removes the Lomonosov Moscow State University from the list of qualifying bodies, payments to which are eligible for research and development (R&D) tax credits and reliefs.
This means that companies making payments to the Lomonosov Moscow State University for the purposes of R&D will no longer be able to receive R&D tax credits or relief. This is part of the UK government’s Russia sanctions policy.
Broadly, tax credits and reliefs are available for expenditure incurred by companies on independent R&D where that expenditure meets certain conditions. One of those conditions is that the expenditure is incurred in making payments to an individual, a firm or a ‘qualifying body’ (e.g. a university or charity). While some institutions are covered by UK legislation, the Treasury also has the power to prescribe other organisations (payments to which otherwise would not qualify) as ‘qualifying bodies’. The list of other qualifying bodies is set out in the Schedule to the Research and Development (Qualifying Bodies) (Tax) Order, SI 2018/217.
This new Order also sets out an additional list of prescribed bodies, meaning that R&D tax credits and reliefs will be available for payments made to those bodies, where the qualifying expenditure is incurred on or after the specified dates (all of which are retrospective). This list is in addition to the list set out in the schedule to SI 2018/217. The new Order comes into force on 13 July 2022.
