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Scientific Research Associations (Taxation)

Volume 301: debated on Friday 21 November 1997

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To ask the President of the Board of Trade if her Department's proposals to change the definition affecting the tax treatment of scientific research associations will have retrospective effect in relation to accounting periods ending in March 1996. [17583]

The position of approvals and the treatment of outstanding applications relating to earlier accounting periods are key issues being addressed by my Department's review of its administration of section 508 of the Income and Corporation Taxes Act 1988 initiated in December 1996.

To ask the President of the Board of Trade what factors led her Department to conduct its exercise to redefine scientific research associations; which current bodies or organisations are under scrutiny; and what are the implications for their tax status. [17531]

The Department initiated the review of its administration of section 508 in December 1996 of the Income and Corporation Taxes Act 1988 because in autumn 1996 it became concerned that over the years its procedures had become flawed and that consequently many previous approvals might be unsound. At present, the Department is looking at the approvals system and, once the review is complete, will consider the position of any bodies seeking approval.