Readers' forum: Research required

My client is a large company which pays corporation tax in quarterly instalments. It has made a claim for research and development tax credits under the research and development expenditure credit (RDEC) scheme. I am looking at the company’s cash flow position and I would appreciate readers’ views on the way this is affected by the interaction between the two sets of provisions.

My interpretation is that the first step is to set the quarterly instalment payments of corporation tax against the final liability and then to allocate the RDEC. If this is the case what happens as in my case if the RDEC amount exceeds the remaining corporation tax liability? Is the repayment of the RDEC subject to the seven steps set out at CTA 2009 s 104N – including the PAYE/National Insurance contributions cap? If this is the case there would be an adverse cashflow...