The appellant company was not precluded from claiming enhanced R&D relief as the relevant expenditure did not fall to be treated as subsidised, due to being met directly or indirectly by the appellant’s clients.

The appellant company carried on a trade of providing construction and refurbishment works to a range of clients for an agreed price. HM Revenue and Customs (HMRC) accepted that the appellant was a small or medium-sized enterprise (SME) that carried out research and development (R&D) and expended sums on the R&D which it was entitled to deduct in computing taxable profits for corporation tax purposes.