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CHF Pip! plc v HMRC

In CHF Pip! plc v HMRC [2021] UKFTT 383 (TC) (20 October 2021) the First-tier Tax Tribunal (FTT) found that an animation production company although trading was not doing so on a commercial basis with a view to a profit. The FTT also briefly considered the ‘risk to capital’ condition for the first time.

The appellant CHF Pip! plc (Pip) was a company that held the intellectual property (IP) for the stories that became a children’s TV series called Pip Ahoy! After some earlier successful EIS-compliant fundraisings Pip issued 12 tranches of shares between May and November 2018. Pip submitted the EIS 1 compliance statements to get permission to issue compliance certificates to investors to enable them to claim income tax relief on their investments. HMRC refused permission. Pip appealed to the FTT.

The questions to be addressed were whether Pip:

  • was trading on a commercial basis with a...
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