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Insufficient proof that qualifying research and development was undertaken

By Mark McLaughlin, September 2020

The appellant company failed to prove that it undertook qualifying research and development, and even if the company had undertaken such work it failed to prove that the costs included in its claim related to research and development activities.   

The appellant company’s business was the provision to third parties of human resource services and systems, including relating to the recruitment of new employees. In its corporation tax returns to 31 December 2014 and 31 December 2015, the appellant claimed research and development (R&D) relief (pursuant to CTA 2009, s 1044) and, on the basis of that relief, R&D tax credits (pursuant to CTA 2009, s 1055). 

The appellant provided HM Revenue and Customs (HMRC) with a document titled ‘R&D Activity Summary’. In

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