In Roger Preston Group Limited v HMRC [2021] TC08025, the First Tier Tribunal (FTT) upheld the appellant's appeal to have the amortisation of its intangible asset allowed for corporation tax purposes.

 The case concerned a long-standing engineering consultancy, its restructuring and eventual sale and whether or not a licence agreement had been properly identified.

 HMRC challenged the deduction claiming:

The FTT considered the licence agreement in detail as this was integral to the appeal. It found that:

The FTT upheld the appeal and the amortisation was allowed.

Comment: It seems strange that HMRC chose to argue this case when several Big 4 accountancy firms and two HMRC enquiries had accepted that the licence was a commercial reality. Even the HMRC expert accounting witness struggled to put forward a convincing and coherent argument.

Useful guides on this topic: 

 Goodwill and the intangibles regime 
How does the Corporation Tax intangible regime work? What is the treatment of goodwill for Corporation Tax? Do companies account for goodwill differently?

Goodwill & Tax: Changes under the new UK GAAP, FRS102 
The rules on when and how to recognise goodwill have changed from April 2019. What are the new rules? What is the impact on businesses?

Intangibles regime and partnership interests  
How does the intangibles regime treat partnership interests? What about other intangibles? Can you get a tax deduction for goodwill amortisation?

External Link

Roger Preston Group Limited v HMRC [2021] TC08025

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