The CIOT has sought to clarify the application of the going concern rules in the context of intra-group transfers of trade where such transfers do not occur within the accounting period for which an R&D claim is being made.
HMRC have confirmed to the CIOT that R&D relief may not be available where the trade of one group company is transferred to another group company meaning that the first company’s accounts are not able to be prepared on a going concern basis (because the trade has ceased).
The point at issue is where the transfer takes place after the end of the accounting period but before the accounts relating to that period have been published – given that under GAAP the transfer would have to be taken into account in assessing going concern status for that period.
HMRC intend to update the relevant guidance...
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The CIOT has sought to clarify the application of the going concern rules in the context of intra-group transfers of trade where such transfers do not occur within the accounting period for which an R&D claim is being made.
HMRC have confirmed to the CIOT that R&D relief may not be available where the trade of one group company is transferred to another group company meaning that the first company’s accounts are not able to be prepared on a going concern basis (because the trade has ceased).
The point at issue is where the transfer takes place after the end of the accounting period but before the accounts relating to that period have been published – given that under GAAP the transfer would have to be taken into account in assessing going concern status for that period.
HMRC intend to update the relevant guidance...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
