10 August 2021

DNAe Group Holdings Limited v HMRC; (FTT)

David Yates QC appeared for DNAe Group Holdings Limited (“DNAe”) which succeeded in establishing that it qualified as an SME for R&D expenditure under s.1044 of the Corporation Tax Act 2009. DNAe specialised in R&D into point of care solutions for DNA gene sequencing detection. The key question in the case was whether DNAe’s parent company, EGL, which was part of the Genting group, was a venture capital company within the meaning of the Annex to Commission Recommendation (EC) No 2003/361. Having reviewed the earlier cases of Pyreos and Monitor Audio, the First-tier Tribunal concluded that EGL was a venture capital company and rejected the argument advanced by HMRC that the investment in DNAe had some ulterior strategic benefit for the Genting group.

The judgment can be read here.