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Collins Construction Ltd v HMRC

FTT rejects HMRC’s interpretation of contracted out expenditure in R&D rules.

In Collins Construction Ltd v HMRC [2024] UK FTT 951 (TC) (21 October) the First-tier Tribunal (FTT) upheld the company’s claim for relief for expenditure on research and development (R&D) ruling that the restriction where expenditure is subsidised does not apply where there is a commercial contract between the parties and where there is no clear link between the price paid by the client and the expenditure on R&D.

The taxpayer was a construction company which both designed and carried out refurbishment projects for other companies. The tenders for the work did not specifically include any research and development work but on occasions the company had to develop an innovative solution to deal with a specific problem. One example cited was an issue with reverberation for which a bespoke method was devised. There was no dispute...

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