Income Tax Act 2007 section 331B

Knowledge-intensive company reaching turnover of £200,000

Section 331B sets out how to determine the date on which a knowledge-intensive company first reaches an annual turnover of £200,000, for the purpose of establishing the alternative initial investing period available to such companies under the VCT rules.

• A knowledge-intensive company is treated as reaching £200,000 annual turnover on a specified date — generally the last day of the first accounting period in which its turnover hits that threshold, provided all previous periods were below £200,000.
• Annual turnover is based on a 12-month measure: if the accounting period is exactly 12 months, that period's turnover is used; if not, the turnover for the 12 months ending at the close of the accounting period is used, with time-based apportionments where necessary.
• Group turnover is included: the relevant company's turnover for any period is treated as including the turnover of any company in the same group during all or part of that period, apportioned on a time basis if the group relationship existed for only part of the period.
• Turnover has the meaning given by section 474(1) of the Companies Act 2006 and is determined by reference to the company's accounts and amounts recognised for accounting purposes.