Income Tax Act 2007 section 252B

Knowledge-intensive company reaching turnover of £200,000

Section 252B explains how to determine the date on which a knowledge-intensive company first reaches an annual turnover of £200,000, which is relevant to calculating the alternative initial investing period under the Enterprise Investment Scheme permitted maximum age requirement.

• A company reaches £200,000 annual turnover when its turnover hits that level for the first time, having been below £200,000 in all previous accounting periods — the precise date depends on the length of the accounting period.
• For a standard 12-month accounting period, the annual turnover is simply the turnover for that period; for non-standard periods, the turnover is measured over the 12 months ending on the last day of the accounting period, with time-based apportionments made where necessary.
• The issuing company's turnover must include the turnover of any group company for the whole or part of the period during which that company was in the same group, with appropriate time-based apportionments for mid-period group membership changes.
• Turnover takes its meaning from section 474(1) of the Companies Act 2006 and must be determined by reference to the company's accounts and amounts recognised for accounting purposes.