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R&D relief: HMRC to update guidance on going concern rules and intra-group transfers

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 has 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 intends to update the relevant guidance in its Corporate Intangibles Research and Development Manual ‘in the coming weeks’.

See Simon’s Taxes