Corporation Tax Act 2009 section 1057

Tax credit only available where company is going concern

Section 1057 establishes that a company must be a going concern in order to claim an R&D tax credit under the SME scheme, and sets out the consequences if the company ceases to operate after making such a claim.

• A company can only claim an R&D tax credit under section 1054 if it is a going concern at the time the claim is made.
• If the company ceases to be a going concern after claiming, the claim is treated as if it was never made, though amounts already paid or applied before cessation are unaffected.
• A company qualifies as a going concern if its most recent published accounts were prepared on that basis and this was not done merely because the company expected to receive R&D relief or tax credits.
• Where accounts were not prepared on a going concern basis solely because of a relevant group transfer, they are treated as if they had been prepared on a going concern basis.