Key Facts
- •MW High Tech Projects UK Ltd (Appellant) claimed £1,934,343.19 Research and Development Expenditure Credit (RDEC).
- •HMRC refused the claim because the Appellant's accounts for 2017 and 2018 stated it was not a going concern, relying on Corporation Tax Act 2009, s 104S and s 104T.
- •The Appellant argued the accounts were incorrect, a prior period adjustment existed, and subsequent law changes were relevant.
- •The Appellant's 2019 accounts were prepared on a going concern basis.
Legal Principles
Statutory provisions must be interpreted purposively but not to the extent of ignoring the words of the statute.
Inco Europe Ltd v First Choice Distribution [2000] UKHL 15
Courts can correct obvious drafting errors but must be abundantly sure of the intended purpose, the inadvertent failure to give effect to that purpose, and the substance of the provision Parliament would have made.
Inco Europe Ltd v First Choice Distribution [2000] UKHL 15
A purposive construction does not allow ignoring the plain meaning of the words used in a statute.
Williams v Central Bank of Nigeria [2014] UKSC 10
Preliminary documents, like the Treasury Report, cannot displace the meaning of clear and unambiguous statutory words.
R (oao O) v SSHD [2022] UKSC 2
Amendments to legislation are not retrospective unless explicitly stated.
Finance (No 2) Act 2023
A company is not a going concern if its latest published accounts were not prepared on a going concern basis (Corporation Tax Act 2009, s 104S and s 104T).
Corporation Tax Act 2009, s 104S and s 104T
Tribunal findings on accountancy matters are findings of fact.
HMRC v Jasper Conran [2023] UKUT 00166 (TCC)
Directors are responsible for deciding whether to prepare accounts on a going concern basis; auditing standards do not override this responsibility.
ISA 200, ISA 570
A prior period adjustment (PPA) does not change previously published accounts.
IAS 8
Outcomes
Appeal dismissed; HMRC's decision upheld.
The Appellant's latest published accounts for both 2017 and 2018 stated it was not a going concern. The statutory provisions are clear and extinguish the RDEC claim in these circumstances. Subsequent arguments regarding the correctness of the accounts, prior period adjustments, and amendments to the law were rejected.