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Stage One Creative Services Ltd v HMRC

It is only a month since, in reporting the decision in Collins Construction [2024] UKFTT 951 (TC) on the application of the subsidised expenditure rules for R&D incurred by SMEs, we opined that it was unlikely that HMRC would try for a third time to apply those rules to ordinary commercial contracts which did not specifically include any R&D work. It turns out that Collins was in fact itself HMRC’s third attempt, following Quinn [2021] UKFTT 437 (TC) and the current case which was heard by the FTT before Collins. HMRC’s evidence in this case gives us an insight into HMRC’s thinking. They did not agree with the decision in Quinn,