CA70030 | Know-how: General: Commercial know-how and franchise agreements do not qualify for capital allowances

Things like market research, customer lists and sales techniques are commercial know-how. They do not assist directly in manufacturing or processing operations. Rather, they are concerned with selling goods or materials once they have been manufactured. They are not industrial information or techniques likely to assist in the manufacture of goods or materials or in the working of a mine or in agricultural operations. This means that commercial; know-how is not within the definition of know-how in CAA and so it does not qualify for capital allowances.

You may get a claim from a person who pays for a franchise agreement that capital allowances are due because all or part of the payment is for know-how. All or part of the payment may be for know-how but it is not likely to be the type of know-how that qualifies for capital allowances. A franchise agreement is essentially a licence to operate a business. Any know-how that is transferred by a franchise agreement is more likely to be commercial know- how than industrial information and techniques. If so it will not qualify for capital allowances.