The decision at the First Tier Tribunal (FTT) in the case of Tanglewood Care Services Limited, the operator of a residential care home, is a classic warning for companies aiming to claim research and development (R&D) tax relief.

HMRC had rejected an R&D tax relief claim by the care home, disallowing the spending of £880,286 on the grounds that no valid R&D work was conducted.

The appellant, Tanglewood believed that attempts to minimise the spread of disease during the pandemic were novel and while the tribunal praised the work conducted by the care home, it concluded that managing operational challenges was not the same as advancing scientific knowledge.