Realbuzz Group Ltd v Revenue and Customs (CORPORATION TAX - DISCOVERY ASSESSMENT - research and development relief - whether officer should reasonably be expected to have been aware of excessive claim for relief when enquiry window closed - what information was made available to the officer?) [2025] UKFTT 493 (TC) (01 May 2025)

Parties

Procedural Posture

Corporation Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Judgment

Legal Issues

1. 1 Whether HMRC was entitled to raise a discovery assessment under Schedule 18 Finance Act 1998 for excessive R&D relief claimed by the appellant for APE 2020
2. 2 Whether a hypothetical HMRC officer could reasonably have been expected, on the basis of information made available before the enquiry window closed, to be aware of the excessive relief
3. 3 Whether the information made available included the 2021 R&D report submitted after the relevant period

Ratio Decidendi

The Tribunal held that the hypothetical officer, with general competence and knowledge of R&D tax law but not specialist software expertise, could not have been reasonably expected, on the basis of the 2020 corporation tax return and accompanying R&D report, to be aware that the entire R&D relief claim for APE 2020 was excessive. The disclosure, while detailed, contained technical complexity and did not clearly alert the officer to the actual insufficiency without further enquiry. The officer was not required to quantify the insufficiency, but the information did not make the excessive claim sufficiently obvious to bar HMRC from raising a discovery assessment. The 2021 R&D report was not...

Court Disposition

Appeal dismissed

Orders

• The discovery assessment issued by HMRC on 1 June 2023 disallowing the R&D relief claim for APE 2020 in the sum of £335,452.57 is upheld.
• The appellant is required to repay the disallowed relief plus interest.