The construction company specialises in large-scale office developments, healthcare facilities and building renovations with annual revenues of £145m, and uses R&D to innovate design, engineering and construction methods in response to client demands.

It claimed R&D SME relief for 27 ‘bespoke construction projects over two separate tax years, 2017-18 and 2018-19. In 2018 Collins Construction claimed £573,056.72 in relief, while just one year later this grew to £2,670,972.94.

The First Tier Tribunal (FTT) did not question whether Collins was defined as an SME, and therefore ‘satisfied all of the conditions of the relief’, but judge Kim Sukul and tribunal member Sonia Gable had to determine if the applications met the rules in Corporation Tax Act 2009 (CTA 2009). This had to establish whether the expenditure for the R&D was ‘subsidised’ or if the additional work was ‘contracted out’.

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