Landmark Victory Against HMRC

 

Accountancy Age reports a “landmark” court judgement has been delivered against HMRC after its denial of £1m worth of SME R&D tax relief to construction firm Quinn London Limited.

HMRC’s denial of the relief was based on its recently tightened interpretation of subsidised R&D expenditure. It contested that, because Quinn’s R&D projects are typically carried out for clients, any expenditure on that project should be treated as subsidised.

Appealing the judgement, specialist R&D tax relief consultancy ForrestBrown argued that HMRC’s interpretation of the legislation was too broad and will narrow the scope of SME R&D tax relief.

Accepting the appeal in favour of Quinn, Judge Morgan stated in her verdict: “It would be wholly out of kilter with the overall SME scheme if an SME were to be denied relief solely because it seeks to recover some or all of the relevant costs under its commercial contracts with its clients.

“If HMRC’s approach were to be adopted, the circumstances in which an SME could claim enhanced R&D relief would seem to be confined to those where it has no prospect of exploiting the R&D for commercial gain.”

HMRC had adjudged that, despite meeting the criteria of the SME R&D relief scheme, Quinn’s subsidisation of expenditure meant it was only eligible for the far less generous R&D Expenditure Credit (typically claimed by larger organisations).

Over the period in question, the difference in value between the two was calculated to be worth more than £1m.

Which rather proves the old adage, don't let the bastards grind you down!

Tax does have to be taxing.

Tax Investigation Insurance

Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:

• Deal with any correspondence from HMRC
• Attend any meeting with HMRC
• Appeal to the First-tier Tribunal or Upper Tribunal
• Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"