In Teksolutions-Inc v HMRC [2019] TC7456 a company's Research & Development claim was rejected in full: the company failed to prove that it had incurred any of the expenses claimed.

  • The company amended its 2014-15 tax returns and claimed Research & Development credits.
  • HMRC enquired into the claims and disallowed them.
  • HMRC's closure notice reduced a claimed trading loss for the period ending 31 January 2015 from £174,025 to Nil and for the period ended 20 October 2015, the trading loss was reduced from £224,300 to nil.
  • The company appealed to the First Tier Tribunal.

The FTT found that:

  • The company's director, Mr Quarm, claimed that all the company records were lost.
  • The director claimed that much expenditure was via Paypal but this was unsupported by evidence to that effect.
  • There was no clear documentary or other objective proof provided to confirm the claimed expenses.
  • Pursuant to s1288 CTA 2009, salaries and wages that remained unpaid 9 months after the end of the relevant accounting period, are not allowable as a deduction.

The FTT held that there was no evidence to show that any expenditure had been incurred and therefore no entitlement to an R&D credit and so it confirmed HMRC's closure notice.


Having established that there was no expenditure, there was no further need for the FTT to determine whether any of the expenditure met the actual qualifying conditions for a valid R&D claim.

Useful guides

Research & Development Relief: at a glance
Freeview summary of this relief

Research & Development Relief: Toolbox
Come and explore our R & D resources

Cost effective R & D Claims

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Successful case management

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External links

Teksolutions-Inc v HMRC [2019] TC7456