Vaccine Research: trading divided

Recent cases such as Tower MCashback and Icebreaker have considered whether, in reality, a taxpayer incurred expenditure ‘on’ an asset or activity in a manner which qualified for tax relief. In Vaccine Research Limited Partnership, the First-tier Tribunal has decided that a partnership did not incur most of its expenditure ‘on’ research and development, thereby denying the majority of its claim for capital allowances. But in doing so, the tribunal took the odd decision to dissect the partnership’s business into trading and non-trading activities, and it left open the characterisation of the partnership’s non-trading receipts.