HMRC is publicising its victory before the First-tier Tribunal in Brain Disorders Research Limited Partnership v HMRC [2015] UKFTT 325 (reported in Tax Journal, 17 July 2015), which involved an ‘artificial tax avoidance scheme’. The FTT ruled against the users’ attempts to claim £29m in tax relief. The investors claimed to have spent £122m on research, when only £7m reached the actual research company.
HMRC says the scheme aimed to enable investors to make large claims to interest relief on their borrowings, and large capital allowances claims were also made. However, the tribunal found that as the partnership was not trading, no tax relief was due.
Jennie Granger, HMRC director general of enforcement and compliance, said: ‘This particular scheme was doubly offensive as it risks bringing fundraising for medical research into disrepute.’ HMRC has also said that tribunals have found in HMRC’s favour in over 80% of avoidance cases that taxpayers have chosen to litigate. Since R&D tax credit schemes were launched in 2000/01, over 100,000 claims have been made and more than £9.5bn in tax relief has been claimed.
HMRC is publicising its victory before the First-tier Tribunal in Brain Disorders Research Limited Partnership v HMRC [2015] UKFTT 325 (reported in Tax Journal, 17 July 2015), which involved an ‘artificial tax avoidance scheme’. The FTT ruled against the users’ attempts to claim £29m in tax relief. The investors claimed to have spent £122m on research, when only £7m reached the actual research company.
HMRC says the scheme aimed to enable investors to make large claims to interest relief on their borrowings, and large capital allowances claims were also made. However, the tribunal found that as the partnership was not trading, no tax relief was due.
Jennie Granger, HMRC director general of enforcement and compliance, said: ‘This particular scheme was doubly offensive as it risks bringing fundraising for medical research into disrepute.’ HMRC has also said that tribunals have found in HMRC’s favour in over 80% of avoidance cases that taxpayers have chosen to litigate. Since R&D tax credit schemes were launched in 2000/01, over 100,000 claims have been made and more than £9.5bn in tax relief has been claimed.
