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HMRC internal manual

Business Income Manual

Specific deductions: advertising: launch costs

This page concerns the initial costs of establishing a market niche for an intangible asset such as a new product or brand, or a magazine title.

An asset of this kind is normally developed from scratch in-house though a concern may sometimes build up acquired intangibles, for example rights in an invention, or a struggling magazine title purchased from the previous owner. Assets of this kind often turn out to be marketable and may change hands for large sums, which are normally capital.

There is general guidance on the distinction between capital and revenue expenditure in BIM35000 onwards.

If a company incurs costs of this type, the expenditure will fall within the intangible assets regime unless the asset already existed on 31 March; see BIM35501.

Intangible rights or assets located offshore

Where substantial expenditure is incurred on launch costs that add value to rights or intangible assets held offshore, the papers should be sent to CTISA, International CT, to consider a challenge under the transfer pricing legislation (see INTM410000 onwards).