Company was not trading for R&D purposes

The taxpayer was in the process of establishing a technology-based entrepreneurial idea – summarised as a ‘blockchain-enabled securities trading platform for traders and trackers’. However the tribunal report states that it was ‘clear’ the idea did not become a reality produced no revenues and never progressed beyond an initial first draft.

The taxpayer claimed significant amounts of relief for research and development (R&D) expenditure which HMRC disallowed.

The taxpayer appealed.

The First-tier Tribunal dismissed the claim on the basis that ‘no meaningful work’ was done in respect of the expenditure on which relief was claimed. The company did not have a bank account during the relevant period because banks were ‘reluctant’ to serve a business plan involving blockchain. Indeed there was little contemporaneous documentation relating to the issues under appeal.

The judge concluded the company was not carrying on a trade saying the idea was...