FB Consulting's James Dudbridge shares his thoughts on HMRC's decision not to appeal two recent FTT decisions: Collins Construction and Stage One Creative Services.
HMRC has now confirmed that it will not appeal the recent FTT decisions – Collins Construction and Stage One Creative Services – dealing with contracted out R&D and subsidised R&D expenditure. Some welcome festive cheer and hopefully (surely?!) we will see this long-running issue resolved in the new year. The judgments in each case were clear-cut and leant heavily on Judge Morgan's analysis and conclusions in Quinn (London) Ltd v HMRC - our client's case which concluded three years' ago. This alignment across the three cases and resulting lack of room for manouevre seems likely to be the reason for HMRC's decision not to appeal, unlike the cited tactical reasons post-Quinn, which did so much to contribute to the current confusion around this issue. More guidance is expected in early 2025 and there will be lots of companies – some in appeal, others still in enquiry – waiting on an update. It's important that these legacy issues are resolved swiftly, providing a clean slate for the merged scheme and its new framework for approaching contracted out activities, which now extends to all companies. In the meantime, you can read about the background to the case that started the trilogy. https://lnkd.in/dQbWJeG8 #taxtribunal #subsidisedexpenditure #contractedout