Tower MCashback: impact on closure notices

Background facts

The Tower MCashback LLPs (the LLPs) claimed first-year allowances (FYAs) in respect of certain software licences under CAA 2001 s 45. HMRC opened enquiries and formed the view that the structure failed in its object of generating 100% FYAs under s 45(4) which disqualified expenditure from being first-year qualifying expenditure if the person potentially entitled to FYAs incurred the expenditure ‘with a view to granting another person a right to use or otherwise deal with’ any of the software in question.

After various exchanges of correspondence between the LLPs and HMRC the LLPs indicated that they intended to apply for a direction from the Special Commissioners that the enquiries be closed. The officer issued closure notices...