Eligibility of R&D tax credit on digital learning platform expenditure

The company business was matching providers and consumers of digital learning services. It used a third party to implement a digital learning platform. The company claimed research and development tax credits on the expenditure but HMRC on enquiring into the claim determined that the qualifying conditions were not met and amended the company’s return. The company appealed.

The burden of proof was on the company to demonstrate that its activities were within the guidelines set out by the Department for Business Innovation and Skills. Unfortunately for the company the way in which the case was managed made it almost impossible for it to meet that burden. The tribunal had issued directions to the parties in the normal way requiring them to exchange witness statements from those witnesses on whom they would rely. The company’s representatives sent (albeit late) witness statements to the tribunal but...