R&D success

The taxpayer company claimed research and development (R&D) relief for 2010 and 2012 on the basis it was small or medium-sized enterprise (SME) within the terms of CTA 2009 s 1119.

Siemens Technology Accelerator (STA) owned a substantial shareholding in the company of between 25% and 50%.

HMRC refused the R&D claim saying STA was not a venture capital business but a wholly owned subsidiary of the Siemens group meaning the taxpayer was not an independent SME which it had to be to qualify for the relief.

The taxpayer appealed.

The First-tier Tribunal noted that a shareholding by STA in excess of 25% but less than 50% would prevent the taxpayer qualifying as an SME unless STA was a venture capital company as defined in article three of Commission Recommendation (EC) no 2003/361.

The tribunal accepted STA was a venture capital investor: it was...