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Upper Tribunal agrees with the taxpayer on payments to secure changes to pension arrangements
The Upper Tribunal allowed E.ON's appeal against HMRC's decisions imposing income tax and national insurance contributions to facilitation payments for changes to pension arrangements.
Read moreLack of documentary evidence no bar to proving capital loss claim
Allowing the taxpayers' appeal, the First-tier Tribunal held the Appellant was entitled to claim a capital loss from an earlier tax year to reduce the capital gains tax due on a gain realised by him on the sale of a commercial property because the claim was notified in time, and that inaccuracies in the Appellant's return had not been brought about deliberately.
Read moreHMRC's Ramsay argument fails
HMRC loses capital allowances case as Ramsay argument fails.
Read moreTribunal considers salaried member rules for the first-time and allows taxpayer's appeal in part
Tribunal considers salaried members rules for the first-time allowing taxpayer's appeal in part
Read moreNew powers proposed to enable law enforcement agencies to seize crypto assets
On 22 September, the UK government introduced The Economic Crime Bill. The Bill contains provisions to make it quicker and easier for law enforcement agencies, such as the National Crime Agency, to seize, freeze and recover cryptoassets used by criminals to launder the proceeds of crime.
Read moreValuing leasehold interests in trade-related properties using profits method does not involve disaggregation of property value and "transferable goodwill"
Valuing leasehold interests in trade-related properties using profits method does not involve disaggregation of property value and "transferable goodwill".
Read moreRepeal of IR35 reforms
The Chancellor announced at last week's “mini-Budget” that the recent changes to the “off-payroll” working rules (commonly referred to as 'IR35') are going to be reversed, from 6 April 2023.
Read morePurpose-based rules: Have we hit BlackRock-bottom?
In HMRC v BlackRock Holdco 5 LLC [2022] UKUT 199 (TCC), the Upper Tribunal (UT) allowed HMRC’s appeal, holding that the First-tier Tribunal (FTT) was wrong to interpose certain terms (covenants) in loans when conducting its analysis of the counter-factual transaction as between the taxpayer and an unconnected third-party. It held that the FTT was wrong to attribute all of the loan debits arising to the taxpayer's commercial main purpose and should instead have arrived at the opposite conclusion.
Read moreHMRC made to cry a river over SEIS defeat
FTT holds in favour of taxpayer in technical SEIS / EIS relief decision.
Read moreTribunal upholds HMRC notice transferring debt from managed service company to its former director
Tribunal upholds HMRC notice transferring a debt from a managed service company to its former director.
Read moreTaxpayer successful in application for permission to rely on expert evidence
Taxpayer successful in application for permission to rely upon expert evidence.
Read moreAll settled!
Loan relationship appeal allowed as credit relating to settlement of litigation due to mis-selling of swaps did not arise from related transaction.
Read morePermission to appeal not required for successful party to a tax appeal
In dismissing the taxpayer's objection, the Upper Tribunal decided that HMRC, who had won before the First-tier Tribunal need not apply for permission to appeal in order to raise two new arguments in response to the taxpayer's appeal to the Upper Tribunal.
Read moreCapital Gains and Principal Residence Relief: What Makes a House?
Allowing the taxpayers' appeals, the First-tier Tribunal held that, for the purposes of calculating entitlement to Principal Residence Relief under sections 222 and 223 of the Taxation of Chargeable Gains Act 1992, "dwelling-house" did not include the land on which the house was built, and "period of ownership" referred only to the period of ownership of the dwelling-house itself.
Read moreTribunal confirms discovery assessment was invalid as enquiry window was still open
Tribunal allows taxpayer's appeal confirming that a discovery assessment raised under section 29 Taxes Management Act 1970, was invalid as the enquiry window was still open.
Read moreAgent was careless notwithstanding white space disclosure
White space disclosure on tax returns not a defence against claim of carelessness, as FTT upholds discovery assessments.
Read moreHMRC fails to discharge burden of proof in appeal against personal liability notices
Taxpayer win in case where MTIC fraud alleged in relation to zero-rating of supplies for VAT.
Read moreTribunal finds taxpayer was non-UK resident despite exceeding the permitted days due to 'exceptional circumstances'
The First-tier Tribunal held that a taxpayer was non-UK resident, despite exceeding the permitted days, due to exceptional circumstances which included the moral obligation to come to the UK to care for a relative and their young children.
Read moreFollower notice penalties cancelled as failure to take 'corrective action' was reasonable in all the circumstances
Allowing an appeal by Mr Andreae, the First-tier Tribunal cancelled penalties HMRC had issued for failure to take corrective action following receipt of follower notices. It was held that this failure was reasonable in all the circumstances where Mr Andreae had relied on the advice of a scheme promotor and later sought further advice from an independent advisor.
Read moreTribunal allows taxpayer's appeal as investments met the risk to capital test required for Enterprise Investment Scheme relief
Allowing an appeal by Inferno Films Ltd, the First-tier Tribunal held that the company had satisfied the risk-to-capital test in section 157A, Income Tax Act 2007, because it had objectives to grow and develop its trade in the long term. HMRC was directed to authorise the issue of compliance certificates under section 204, Income Tax Act 2007, for the purposes of Enterprise Investment Scheme relief.
Read moreTax Tribunal cancels discovery assessments and late filing penalties
In Robert Don Hunter Dougan v HMRC [2022] UKFTT 00140 (TC), the First-tier Tribunal (FTT) cancelled certain discovery assessments issued to a taxpayer by HMRC, on the basis they were issued out of time because the taxpayer's behaviour was careless rather than deliberate, for the purposes of section 36, Taxes Management Act 1970 (TMA). The FTT also cancelled various late filing penalties and late payment surcharges issued by HMRC, on the basis the notices were not validly served on the taxpayer.
Read morePermission from the Upper Tribunal needed to argue a new point which was not before the First-tier Tribunal
UT permission required to argue a point not argued before the FTT.
Read moreAppeal against discovery assessment allowed as SATR was filed by unauthorised agent
Allowing an appeal by Mr McCumiskey, the First-tier Tribunal held that HMRC's discovery assessment was invalid on the basis that the purported tax-return had been fraudulently filed and had included an unauthorised and unsubstantiated claim for SEIS relief.
Read moreDirectors did not breach fiduciary duty in relation to insolvent company's participation in failed tax avoidance scheme
In Stephen John Hunt (Liquidator of Marylebone Warwick Balfour Management Ltd) v Richard Balfour-Lynn and others [2022] EWHC 784 (Ch), the High Court decided that the directors of a company which went into liquidation after participating in a failed tax avoidance scheme did not breach their fiduciary duties and payments made pursuant to the scheme were not transactions defrauding creditors.
Read moreCentre of vital interests tiebreaker test saves taxpayer over £10 million
High net worth individual on right side of centre of vital interests tiebreaker test.
Read moreHMRC's civil and criminal powers
HMRC has been provided with extensive and wide-ranging powers, which have increased exponentially in recent years. This article considers HMRC’s main investigatory and assessment powers, by reference to its general enquiries, as well as specific/aspect enquiries, including criminal investigations.
Read moreAccounting rules prevail following HMRC loss in the Supreme Court
Dismissing an appeal by HMRC, the Supreme Court in HMRC v NCL Investments Ltd and another [2022] UKSC 9, held that deductions for corporation tax purposes are allowable for grants of employee share options.
Read moreTax Tribunal confirms documents sought by HMRC were legally privileged
In Colin Wiseman v HMRC [2022] UKFTT 00075 (TC), the First-tier Tribunal (FTT) confirmed that certain documents which were requested by HMRC under paragraph 1, Schedule 36, Finance Act 2008, were subject to legal professional privilege (LPP) and should not be disclosed.
Read moreChanges made to top slicing relief held not to apply retrospectively
Changes introduced by Finance Act 2020 to top slicing relief are not retrospective in effect.
Read moreTribunal erred in law by refusing HMRC's application to strike out taxpayer's appeal
The Upper Tribunal has held that the First-tier Tribunal erred in law by striking out HMRC's application to strike out a taxpayer's appeal of a decision by HMRC to deny Input VAT on the basis of no reasonable prospect of success.
Read moreTaxpayer successfully appeals information notices as information requested not reasonably required
Allowing an appeal against HMRC's information notices, the First-tier Tribunal in Yerou and another v HMRC [2022] UKFTT 79 (TC), found that the information was not reasonably required.
Read moreTax Tribunal dismisses third party application for disclosure of documents
In Cider of Sweden Ltd v HMRC and another [2022] UKFTT 00076 (TC), the First-tier Tribunal (FTT) dismissed an application by Ernst & Young LLP (EY) for disclosure of documents which related to appeal proceedings before the FTT between Cider of Sweden Ltd (CSL) and HMRC.
Read moreTribunal confirms TV presenter not subject to IR35 rules
IR35 does not apply where a significant number of factors make it clear that a presenter "was in business on his own account".
Read moreTribunal confirms that certain studies and project management costs relating to offshore windfarms qualify in part for capital allowances
The First-tier Tribunal has confirmed that certain studies and project management costs relating to offshore windfarms qualify in part for capital allowances.
Read moreNo tax due on transfer of business to connected company
The First-tier Tribunal in Conran and another v HMRC [2022] UKFTT 39 (TC), concluded that the transfer of a business between connected parties resulted in no capital gains tax liability for the seller, having reduced the stated £8.25m valuation of the business to £1 for tax purposes.
Read moreMatchmaking services were subject to special place of supply rule for B2C consultancy services
In Gray & Farrar International LLP v HMRC [2021] UKUT 293 (TCC), the Upper Tribunal (UT) decided that matchmaking services supplied to clients outside the EU fell within Article 59(c) of Council Directive 2006/112/EC (the Principal Directive) and were therefore outside the scope of VAT.
Read morePayments to employees were "relevant motoring expenditure" and should be disregarded for the purposes of NICs
In Willmott Dixon Holdings Ltd v HMRC [2022] UKFTT 6 (TC) the First-tier Tribunal (FTT), held that payments to employees were "relevant motoring expenditure" (RME) and could be disregarded for the purposes of Class 1 National Insurance Contributions (NICs).
Read moreHMRC misses penalty
HMRC penalty for EBT use successfully appealed as no deliberate or careless conduct leading to inaccuracy in tax return
Read moreNo power for HMRC to issue partial closure notice without assessment of tax due
The Court of Appeal has confirmed that HMRC cannot issue a partial closure notice without assessment of tax due.
Read moreExpenses incurred in defending partners against criminal charges were incurred "wholly and exclusively" for the business and were deductible
In TR, SP and SR Rogers v HMRC [2021] UKFTT 0458 (TC), the First-tier Tribunal (FTT) decided that expenses incurred defending two of the partners of a partnership against criminal charges were incurred wholly and exclusively for the business of the partnership and the expenses were therefore deductible.
Read moreTribunal reduces scope of Schedule 36 Information Notices
HMRC bears the burden of proof that the information requested to check a taxpayer's tax position, as set out in Schedule 36 information notices, is reasonably required and that records requested are statutory records.
Read moreEntrepreneurs' relief applied to disposal of business premises
Entrepreneurs' relief (now Business Asset Disposal Relief) applies to disposal of premises as part of long-term sale of business
Read moreQuinn – Taxpayer entitled to claim enhanced research and development relief
In Quinn (London) Ltd v HMRC [2021] UKFTT 0437 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against HMRC's decision to refuse its claims for enhanced research and development relief (enhanced R&D relief), on the basis that the claimed expenditure was “subsidised” within the meaning of section 1138(1)(c), Corporation Tax Act 2009 (CTA 2009).
Read moreMinstrell Recruitment – HMRC not required to disclose the names of its officers involved in a Gross Payment Status revocation decision
In Minstrell Recruitment Ltd v HMRC [2021] UKFTT 0344 (TC), the First-tier Tribunal (FTT) held that HMRC need not disclose the names of the HMRC officers involved in making a gross payment status (GPS) revocation decision where that decision had been successfully appealed, for the purpose of determining whether HMRC had acted unreasonably in the conduct of that appeal.
Read moreJTC - Escrow agreement set aside on basis of mistake
Rescission granted of pension arrangements with tax impact due to incorrect advice for temporary UK non-resident moving to UAE.
Read moreKishore – Court of Appeal rejects HMRC's strike out application
In HMRC v Dhalomal Kishore [2021] EWCA Civ 1565, the Court of Appeal rejected HMRC's application to strike out the taxpayer's grounds of appeal against penalties for inaccuracies in VAT returns, as the application was an abuse of process.
Read moreQuarterly Contentious Tax Review – Winter 2021
HMRC has extensive powers to require information and documentation from taxpayers. These powers were bolstered in the last Finance Act to include financial institution notices. Failure to comply with information notices can attract penalties. The most severe penalties are those imposed by the Upper Tribunal (UT). We examine, below, HMRC's increasing use of these powers, together with HMRC's penchant for 'nudge' letters and recent developments in the application of the transfer of assets abroad (TOAA) provisions.
Read moreThe Medical Defence Union – insurance premium rebates not taxable receipts
Insurance premium rebate does not count as a taxable receipt, but instead is merely a (non-taxable) refund to the mutual fund for the benefit of its members.
Read moreGB Fleet Hire - Upper Tribunal allows appeal against First-tier Tribunal strike out decision
In a rare move, the Upper Tribunal overturned the decision of the First-tier Tribunal to strike out an appeal on the grounds that the tribunal's decision was irrational.
Read moreVitol Aviation – Tribunal directs HMRC to issue closure notices where diverted profits tax review periods are ongoing
In Vitol Aviation UK Ltd and others v HMRC [2021] UKFTT 0353 (TC), the First-tier Tribunal (FTT) granted the Applicants' application for closure notices in respect of corporation tax enquiries, notwithstanding that the review periods for diverted profits tax (DPT) notices were ongoing in respect of the same accounting periods.
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