Annual and transition report of foreign private issuers [Sections 13 or 15(d)]

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 14. INCOME TAXES

 

    Year Ended     Year Ended     Year Ended  
   

December 31,

2024

    

December 31,

2023

    

December 31,

2022

 
    £     £      £  
Current tax                        
Corporation tax credit     651,971       1,088,729       1,720,000  
Total current tax credit     651,971       1,088,729       1,720,000  
                         
Reconciliation of loss before tax to the tax credit for the year                        
Loss before tax     12,806,001       6,995,682       3,033,601  
                         
Loss on ordinary activities multiplied by the standard rate of tax of 25% (2023: 23.5%)     3,201,500       1,643,985       576,384  
                         
Adjustments in respect of prior years     -       45,136       154,422  
Non-deductible expenses     (1,130,034 )     (414,859 )     (1,834,581 )
Super deductions    

-

      

-

      

13,178

  
Change in deferred tax asset     2,220,942      

-

      

(186,879

 )
Change in valuation allowance     (1,817,638 )     357,897       (671,566 )
Foreign rate differential     -       (29,318 )      -  
Other     (75,288 )     (233,096 )      -  
Additional allowance in respect of enhanced R&D relief    

-

      

-

      

4,198,115

  
Surrender of tax losses for R&D tax credit refund     (876,305 )     (1,082,905 )     (2,109,111 )
Adjustments relating to GAAP     (1,523,177 )     (241,704 )      14,460  
R&D tax credits generated     651,971       1,043,593       1,565,578  
Current tax credit     651,971       1,088,729       1,720,000  

 

As of December 31, 2024, the Company’s net operating loss carryforwards in the United Kingdom totaled £22.3 million. U.K. net operating loss carryforwards can be carried forward indefinitely to be offset against future tax liabilities of the Company. As of December 31, 2024, the Company’s net operating loss carryforwards in the United States of America totaled £2.1 million. U.S. net operating loss carryforwards can be carried forward indefinitely to be offset against future tax liabilities of the TC BioPharm (North America) Inc.

 

The accounting and valuation of warrant instruments results in volatility in the consolidated statement of operations for UK accounting purposes, and therefore for UK tax purposes. This volatility has resulted in gains being included within the consolidated statement of operations for the years ended December 31, 2024 and 2023. Prima facie these gains are taxable, subject to certain exemptions applying. These exemptions are required to be reviewed in relation to each warrant instrument on an annual basis, to the extent that the exemptions do not apply, the resulting profit and loss credits are taxable.

 

Significant components of the Company’s deferred tax assets as of December 31, 2024 and 2023 are summarized below.

 

    2024     2023  
Deferred tax assets:                
Net operating losses   £ 6,190,130     £ 4,357,668  
Fixed asset     73,012       79,338  
Other     9,448       17,946  
Total deferred tax assets     6,272,590       4,454,952  
                 
Valuation allowance     (6,272,590 )     (4,454,952 )
                 
Net deferred tax asset, net of valuation allowance   £ -     £ –  

 

After weighing all available positive and negative evidence for the periods ended December 31, 2024 and 2023, the Company has recorded an increase/(decrease) in the valuation allowance of £1,817,638 and (£357,897), respectively.

 

The Company continuously monitors its current and prior filing positions in order to determine if any unrecognized tax positions should be recorded. The analysis involves considerable judgement and is based on the best information available. For the periods ended December 31, 2024 and 2023, the Company is not aware of any positions which require an uncertain tax position liability.

 

The domestic and foreign components of loss before income taxes for the years ended December 31, 2024, 2023 and 2022 are as follows:

 

   

Year Ended

December 31, 2024

    

Year Ended

December 31, 2023

    

Year Ended

December 31, 2022

  
Domestic   £ (11,923,810 )   £ (5,816,637 )   £ (2,265,019 )
Foreign     (882,191 )     (1,179,045 )     (768,582 )
Net loss, before tax   £ (12,806,001 )   £ (6,995,682 )   £ (3,033,601 )