Corporation Tax Act 2009 section 104T

"Going concern"

Section 104T defines what it means for a company to be a "going concern" for the purposes of claiming R&D expenditure credits, including how indicators of insolvency are treated and a special rule where accounts are not prepared on a going concern basis solely because of a group transfer.

• A company is a going concern if its latest published accounts were prepared on that basis and there is no evidence the accounts were prepared on that basis specifically to qualify for R&D expenditure credits.
• Signs that a company is in administration or liquidation are assessed by reference to the Insolvency Act 1986, the Insolvency (Northern Ireland) Order 1989, or equivalent legislation in other jurisdictions.
• If the sole reason a company's 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.
• The going concern requirement acts as a safeguard to ensure that R&D expenditure credits are directed towards viable, active businesses rather than companies facing insolvency.