Corporation Tax Act 2009 section 1046

Relief only available where company is going concern

Section 1046 establishes a precondition that a company must be a going concern in order to claim relief for research and development expenditure under sections 1044 or 1045.

• A company may only claim R&D relief (additional deduction or pre-trading loss treatment) if it qualifies as a going concern at the relevant time.
• Going concern status requires that the company's most recent accounts were prepared on a going concern basis, and not solely in anticipation of receiving R&D tax credits.
• A company in administration or liquidation — whether under UK insolvency law or an equivalent regime outside the UK — is not treated as a going concern.
• If the only reason a company's latest accounts were not prepared on a going concern basis is a relevant group transfer, those accounts are treated as though they were prepared on a going concern basis.