HMRC refused to pay Stage One Creative Services (SOCS) a £720,000 research & development (R&D) tax relief claim as it believed the work carried out by the stage design and lighting production company had been sub-contracted and that any additional work had been contracted in the original quotes.

The accounting periods in question ran from December 2017 to 2019 and HMRC issued several discovery assessments totalling £718,466. These were broken down into £248,100.67 plus interest of £271,395.35 for 2017-18, and a demand for £198,971.32 for 2018-19.

Tim Leigh, managing director of Stage One appeared at the First Tier Tribunal (FTT), while tax specialists from Catax and accountancy firm Clive Owen LLP were called as witnesses.