HMRC correct to refuse late claim for R&D expenditure credit

The taxpayer wished to claim research and development (R&D) expenditure credit. It submitted an amended corporation tax return to make the claim on time but filed its corporation tax computation 20 days late.

The taxpayer’s agent explained that their first attempt to file the forms online was unsuccessful but they were eventually able to submit only the amended tax return.

HMRC refused to accept the claim saying there was no exceptional reason for the lateness of the computation and the circumstances were not outside the taxpayer’s control.

The taxpayer brought judicial review proceedings on the grounds that HMRC had erred in law or alternatively that its refusal of the claim was unreasonable.

The Scottish Court of Session said the issue turned on whether the taxpayer was required to include a computation with the amended return. There was ‘no doubt’ that HMRC had the power to impose this requirement (FA 1998...