Flame Tree Publishing Limited v The Commissioners for HMRC
Decision date: 25 April 2024
Neutral citation: [2024] UKFTT 349 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Flame Tree Publishing Ltd appealed HMRC’s refusal of R&D tax relief claimed in an amended CT return for year to 30 June 2018. The Tribunal found the company had one composite Project to make archival books searchable but failed to show an advance in overall knowledge or capability or resolution of scientific/technological uncertainty beyond what a competent professional could readily deduce, and also failed to support the claimed expenditure with credible evidence. The appeal was dismissed and HMRC’s closure notice and assessment increasing tax by £50,662 were upheld.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
A claimant for R&D tax relief must demonstrate, with competent evidence, that the work sought an advance in overall knowledge or capability in a field and involved resolving scientific or technological uncertainty not readily deducible by a competent professional; additionally, claimed costs must be tied to qualifying R&D activities with credible contemporaneous records and cannot include costs for work actually contracted out unless claimed under the appropriate contracted-out provision.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that changing the pleaded scope of projects late in proceedings is permissible but does not lessen the claimant’s evidential burden; and that involvement or changes in HMRC personnel or technical teams do not excuse a claimant’s lack of supporting evidence. These comments were treated as non-decisive observations.