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Corrado – Tribunal cancels follower notice penalties
In Giulio Corrado v HMRC [2019] UKFTT 275 (TC), the First-tier Tribunal (FTT) has set aside a follower notice penalty as the taxpayer's failure to take corrective action in response to a follower notice was reasonable in all the circumstances.
Read moreWarshaw – preference shares equal to ordinary share capital and taxpayer entitled to entrepreneurs' relief
In Steven Warshaw v HMRC [2019] UKFTT 268 (TCC), the First-tier Tribunal (FTT) has confirmed that as the relevant preference shares did not attract a fixed dividend, they could amount to ordinary share capital for the purpose of entrepreneur's relief (ER).
Read moreDevelopment Securities – Jersey-incorporated SPVs held not to be UK tax resident
In Development Securities plc and others v HMRC [2019] UKUT 0169 (TCC), the Upper Tribunal (UT) has held that a number of Jersey-incorporated companies were in fact resident for tax purposes in Jersey. This decision overturned the decision of the First-tier Tribunal (FTT), which had held that the companies were UK tax resident as a result of the central management and control (CMC) of the companies being exercised in the UK (through the companies’ parent). The UT took the view that the FTT had incorrectly concluded that the Jersey company directors had abdicated their decision-making responsibility.
Read moreMarks & Spencer – 'free' wine supplied as part of a promotional offer was subject to VAT
In Marks and Spencer plc v HMRC [2019] UKUT 0182 (TCC), the Upper Tribunal (UT) has upheld the First-tier Tribunal's (FTT) decision that wine supplied 'free of charge' as part of a promotion was subject to VAT.
Read moreOWD – HMRC unable to permit temporary trading pending appeal
In OWD Ltd trading as Birmingham Cash and Carry (in Liquidation) and Anor v HMRC [2019] UKSC 30, the Supreme Court has held that HMRC does not have power under section 88C, Alcohol Duties Liquor Act 1979 (ALDA) or section 9, Commissioners for Revenue and Customs Act 2005 (CRCA), to permit temporary trading pending the determination of an appeal to the First-tier Tribunal (FTT) against HMRC's refusal to grant approval under the Alcohol Wholesalers Registration Scheme (AWRS).
Read moreHaworth – Court of Appeal confirms HMRC misdirected itself and quashes payment notices
The recent unanimous judgment of the Court of Appeal in R (on the application of Haworth) v HMRC [2019] EWCA Civ 747, is the first successful judicial review challenge against follower and accelerated payment notices. The decision throws into question the way in which the relevant statutory provisions, contained in Finance Act 2014 (FA 2014), relating to follower and accelerated payment notices have been interpreted and operated by HMRC and as a consequence, many other notices may also have been issued by HMRC unlawfully.
Read moreDerry - HMRC challenge to share loss relief claim flawed
In R (on the application of Derry) v HMRC [2019] UKSC 19, the Supreme Court has dismissed HMRC's appeal and confirmed that the taxpayer was entitled to claim share loss relief in the year in which the loss was incurred, rather than the following year.
Read moreNational Car Parks - Are overpayments consideration for VAT purposes?
In National Car Parks Ltd v HMRC [2019] EWCA Civ 854, the Court of Appeal has confirmed that excess amounts paid by customers at pay and display car parks were consideration for VAT purposes.
Read moreTooth – Court of Appeal confirms discovery assessment was invalid
In HMRC v Tooth [2019] EWCA Civ 826, the Court of Appeal has held that a discovery assessment was invalid, but the taxpayer's inaccuracy in his return was deliberate.
Read moreHannover - SDLT avoidance and corporate property deals – the importance of timing!
In Hannover v HMRC [2019] UKFTT 0262 (TC), the First-tier Tribunal (FTT) has held that the stamp duty land tax (SDLT) anti-avoidance rule in section 75A, Finance Act 2003, applied to a series of transactions that included the sale of units in a Guernsey property unit trust (GPUT), even though there was no tax avoidance motive and each transaction was 'appropriately' taxed.
Read moreQ Ltd – interim injunction continued pending appeal
In Q Ltd v HMRC [2019] EWHC 712 (QB), in considering the balance of risk, the High Court continued an interim injunction pending the outcome of the taxpayer's appeal to the First-tier Tribunal (FTT).
Read moreStamp duty land tax (SDLT) avoidance and corporate property deals – the importance of timing!
The First-Tier Tribunal has, in a recent decision, caused something of a stir for clients and advisors familiar with the well-trodden (and, usually, tax-efficient) use of offshore unit trusts to hold UK property.
Read moreHMRC's unreasonable conduct leads to costs award against it
In E v HMRC [2018] UKFTT 771 (TC), the First-tier Tribunal (FTT) has found that HMRC acted unreasonably in not withdrawing an information notice earlier than it did and awarded the taxpayer his costs.
Read moreAtherton – discovery assessment not stale and taxpayer was careless
In Richard Atherton v HMRC [2019] UKUT 0041 (TCC) the Upper Tribunal (UT) has held that a discovery had not become stale by the time an assessment was issued under section 20, Taxes Management Act 1970 (TMA) and that the taxpayer had been careless in making an inadequate 'white space' disclosure in his self-assessment return.
Read moreHargreaves: Even staler!
In Hargreaves v HMRC [2019] UKFTT 0244 (TC), the First-tier Tribunal (FTT) has again found that HMRC's discovery of an underpayment of tax had become 'stale' and accordingly the subsequent assessment issued under section 29, Taxes Management Act 1970 (TMA) was invalid.
Read moreSnow Factor – Upper Tribunal determines the meaning of "financial extremity"
In Snow Factor Ltd v HMRC [2019] UKUT 77 (TCC), the Upper Tribunal (UT) has determined the meaning of the phrase "financial extremity might be reasonably expected to result from that decision of HMRC" in section 85(B), Value Added Tax Act 1994 (VATA).
Read moreMacleod – insurance premiums paid not earnings from taxpayer's employment
In Macleod and Mitchell Contractors Limited and William Mitchell v HMRC [2019] UKUT 0046 (TCC), the Upper Tribunal (UT) has held that insurance premiums paid by the company on policies taken out in the sole director's name were not earnings from employment.
Read moreTang - Bare trust existed notwithstanding lack of trust document
In Lily Tang v HMRC [2019] UKFTT 81, the First-tier Tribunal (FTT) held that there was a bare trust despite the absence of a trust document and that the bare trustee was not liable to notify HMRC or for tax in relation to funds she held on trust.
Read moreAlbatel - TV presenter wins £1.2m tax case
In Albatel Ltd v HMRC [2019] UKFTT 0195 (TC), the First-tier Tribunal (FTT) held that the so-called IR35 legislation did not apply to the provision of services by Lorraine Kelly to ITV.
Read moreGardner Shaw – directions subject to a pending appeal should not have been varied
In Gardner Shaw UK Ltd and others v HMRC [2018] UKUT 419 (TCC), the Upper Tribunal (UT) has held that the First-tier Tribunal (FTT) should not have varied directions which the FTT had previously issued, when they had been the subject of an unsuccessful appeal to the UT and when an appeal to the Court of Appeal was pending.
Read morePraesto - input tax recoverable on fees incurred in defending proceedings against its director
In Praesto Consulting UK Ltd v HMRC [2019] EWCA Civ 353, the Court of Appeal has held that a company was entitled to recover input tax on legal fees it incurred in defending civil proceedings brought against its director.
Read moreTime to abandon 'fairness'?
In recent years the word 'fair' has become a common feature of HMRC's lexicon. It is often connected with claims by HMRC that a taxpayer is not paying his or her "fair share of tax". It is disseminated with predictable regularity across HMRC press releases, guidance notes and spokesperson's quotes.
Read moreWhen does delay by HMRC render a discovery assessment invalid?
In the recent case of Clive Beagles v HMRC [2018] UKUT 380 (TCC), the Upper Tribunal (UT) held that a delay of nearly two and a half years between (i) HMRC discovering that a taxpayer's self-assessment tax return was insufficient and (ii) HMRC issuing an assessment, was too long. As the discovery had become 'stale' by the time of the assessment, the assessment was invalid.
Read moreCurzon – contractor loan scheme notifiable under DOTAS but scheme administrator not a 'promoter'
In HMRC v Curzon Capital Ltd [2019] UKFTT 0063 (TC), the First-tier Tribunal (FTT) has held that a contractor loan scheme was a notifiable arrangement for the purposes of the disclosure of tax avoidance arrangements (DOTAS) regime, but that the scheme administrator was not a promoter. Accordingly, HMRC's application for an order that the arrangements were notifiable was dismissed.
Read moreJimenez - Court of Appeal confirms extra-territorial reach of information notices
In R (oao Jimenez) v HMRC [2019] EWCA Civ 51, the Court of Appeal has held that HMRC can issue an information notice to a taxpayer under paragraph 1, Schedule 36, Finance Act 2008 (FA 2008), even if he is non-resident.
Read moreHegarty – HMRC information notices invalid
In Hegarty v HMRC [2018] UKFTT 0774 (TC), the First-tier Tribunal (FTT) has held that HMRC issued invalid information notices under paragraph 1, Schedule 36, Finance Act 2008 (FA 2008), as it did not provide any evidence to support its suspicion that the taxpayers had paid insufficient tax.
Read moreHMRC launches profit diversion compliance facility
On 10 January 2019, HMRC launched their Profit Diversion Compliance Facility (PDCF). The PDCF is a new voluntary disclosure facility, aimed at multinational enterprises (MNEs), that provides them with an opportunity to disclose and correct tax inaccuracies relating to profits diverted out of the UK.
Read moreHymanson – HMRC's decision to revoke the taxpayer's fixed protection was unreasonable
In G Hymanson v HMRC [2018] UKFTT 667, the First-tier Tribunal (FTT) has held that HMRC’s decision to revoke the taxpayer's fixed protection was unreasonable and directed that it be reinstated. In so finding, the FTT applied the equitable maxim ‘that which should be done should be treated as having been done’.
Read moreWilsons – HMRC unable to obtain law firm's records
In Wilsons Solicitors LLP v HMRC [2018] UKFTT 627 (TC), the First-tier Tribunal (FTT) has held that the obligation to keep records under the Money Laundering Regulations 2007 (MLR) does not make a law firm a relevant data-holder for the purposes of HMRC's data-gathering powers.
Read moreOmagh: tax penalty was a "criminal charge" for the purposes of Article 6 of the ECHR
In Omagh Minerals Ltd v HMRC [2018] UKFTT 697 (TC), the First-tier Tribunal (FTT) has held that despite the civil nature of the underlying tax dispute, an aggregates levy penalty imposed on the taxpayer by HMRC was a "criminal charge" to which Article 6 (right to a fair trial), European Convention on Human Rights (ECHR), applied.
Read moreBanks: A real Brexit tax
In A Banks v HMRC [2018] UKFTT 617, the First-tier Tribunal (FTT) heard an appeal by Mr Arron Banks against HMRC's decision to deny him relief on certain donations he and his companies had made to the UK Independence Party (UKIP). The FTT decided that his rights had been infringed under the European Convention on Human Rights (the Convention) but there was nothing it could do to remedy that infringement.
Read moreGraham: taxpayer successfully appeals against APN penalty
In Kevin Graham v HMRC [2018] UKFTT 661 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against a penalty imposed by HMRC for non-payment of an accelerated payment notice (APN).
Read moreAddo - Disclosure against HMRC in tax appeals
In Addo v HMRC [2018] UKFTT 530 (TC), the First-tier Tribunal (FTT) considered the principles governing disclosure in the context of appeals before the FTT. This blog is based on an article which was first published in Tax Journal on 22 November 2018. RPC acted for the taxpayer in this case.
Read moreVacation Rentals – taxpayer had legitimate expectation that HMRC guidance could be relied on
In R (on the application of Vacation Rentals (UK) Ltd) (formerly The Hoseasons Group Ltd) v HMRC [2018] UKUT 383 (TCC), the Upper Tribunal (UT), has held that HMRC was bound by its published guidance in Business Brief 18/06 (BB18/06) concerning the treatment of payments for card handling services.
Read moreLivery business qualifies for BPR for IHT purposes
In HMRC v Personal Representatives of the Estate of Maureen M Vigne [2018] UKUT 357 (TCC), the Upper Tribunal (UT), in dismissing HMRC's appeal, has confirmed that a livery business attracted business property relief (BPR) under section 105, Inheritance Tax Act 1984 (IHTA), as the business did not consist of wholly or mainly in making or holding investments.
Read moreThe Serpentine Trust Ltd – HMRC entitled to raise VAT assessments despite binding contractual agreement
In The Serpentine Trust Ltd v HMRC [2018] UKFTT 535, the First-tier Tribunal (FTT) has held that although HMRC had agreed with the taxpayer one basis for calculating VAT, under its alternative dispute resolution (ADR) procedure, it was not precluded from raising VAT assessments on a different basis because the agreement reached was ultra vires and therefore void.
Read morePatel – HMRC ordered to close enquiry which was "drifting aimlessly"
In Patel v HMRC [2018] UKFTT 0561 (TC), the First-tier Tribunal (FTT) directed HMRC, pursuant to section 28A, Taxes Management Act 1970 (TMA), to close its enquiry.
Read moreThornton – Identifiable HMRC officer must determine penalties
In Robert, Adam and Dorothy Thornton (trading as A* Education) v HMRC [2018] UKFTT 568 (TC), the First-tier Tribunal (FTT) has held that penalties for failure to file employment intermediaries returns (EIRs) were invalidly issued, as they had not been made by an identifiable officer of HMRC under section 100, Taxes Management Act 1970 (TMA).
Read moreGriffiths – appeal against HMRC penalties allowed as notice to file was invalid
In Griffiths v HMRC [2018] UKFTT 0527 (TC), the First-tier Tribunal (FTT) has allowed the taxpayer's appeal against penalties imposed by HMRC as HMRC's notice to file a tax return was invalidly issued and in any event, the taxpayer had a reasonable excuse for failing to submit his return.
Read moreReeves - CGT holdover relief available where transferor is foreign controller of transferee
In Reeves v HMRC [2018] UKUT 293 (TCC), the Upper Tribunal (UT) has held that a non-resident taxpayer was entitled to holdover relief from capital gains tax (CGT) on a disposal he had made when he gifted his interest in a limited liability partnership (LLP) to a UK-resident company, of which he was the sole shareholder.
Read moreProfessional Game Match Officials – football referees not employed for tax purposes
In Professional Game Match Officials Ltd v HMRC [2018] UKFTT 528, the First-tier Tribunal (FTT) has held that football referees and other match day officials were not employees of Professional Game Match Officials Ltd (PGMOL).
Read moreHMRC cannot require an auditor to provide information regarding a taxpayer's audited accounts even if the auditor also acts as the taxpayer's tax accountant
In HMRC ex parte a Taxpayer [2018] UKFTT 541 (TC), the First-tier Tribunal (FTT) has held that paragraph 24, Schedule 36, Finance Act 2008 (FA 2008), protects a taxpayer's auditor, who also prepares and files the taxpayer's tax returns, from having to disclose information and documents to HMRC regarding the taxpayer's audited accounts.
Read moreDone Brothers – supplies through fixed odds betting terminals exempt from VAT
In Done Brothers (Cash Betting) Ltd v HMRC [2018] UKFTT 406 (TC), the First-tier Tribunal (FTT) has held that supplies made through fixed odds betting terminals (FOBT) are exempt from VAT.
Read moreAtherley - qualifying loan write off created an allowable loss
In Douglas Atherley v HMRC [2018] UKFTT 0408 (TC), the First-tier Tribunal (FTT) has found that the taxpayer's partial writing-off of a loan made to a company of which he was the sole shareholder, created an allowable loss under section 253(3), Taxation of Chargeable Gains Act 1992 (TCGA).
Read moreNewton – Tribunal confirms that "statutory records" should be narrowly construed
In Newton v HMRC [2018] UKFTT 513 (TC), the First-tier Tribunal (FTT) has held that, due to the lack of taxpayer appeal rights, the definition of "statutory records" for the purpose of an information notice issued pursuant to Schedule 36, Finance Act 2008 (FA 2008), must be construed narrowly.
Read moreExpion: No valid determination of penalties by HMRC
In Expion Silverstone Ltd v HMRC [2018] UKFTT 0460 (TC), the First-tier Tribunal (FTT) has held that no valid determination was made by an officer of the board under section 100, Taxes Management Act 1970 (TMA), in respect of penalties issued following the failure to file Employment Intermediaries returns.
Read moreGraham - holiday letting business qualified for business property relief
In The Personal Representatives of Grace Joyce Graham (deceased) v HMRC [2018] UKFTT 0306 (TC), the First-tier Tribunal (FTT) has held that a furnished holiday letting business did not consist wholly or mainly of making or holding investments and so qualified for business property relief (BPR).
Read morePertemps: Expenses salary sacrifice scheme not an economic activity for VAT purposes
In Pertemps Limited v HMRC [2018] UKFTT 0369 (TC), the First-tier Tribunal (FTT) has held that a salary sacrifice scheme providing travel and subsistence expenses to employees was not an economic activity for VAT purposes.
Read moreJ P Whitter - HMRC not obliged to consider impact of cancellation of Gross Payment Status on business
In J P Whitter (Water Well Engineers) Ltd v HMRC [2018] UKSC 31, the Supreme Court has confirmed the view of the Court of Appeal that HMRC has the power to remove 'Gross Payment Status' from sub-contractors under the Construction Industry Scheme, without an obligation to take into account the impact on the tax-paying business.
Read moreGroves – Tribunal confirms that a notice to file must be given by an identified HMRC officer
In Groves v HMRC [2018] UKFTT 0311 (TC), the First-tier Tribunal (FTT) has allowed the taxpayer's appeal against penalties issued by HMRC pursuant to Schedule 55, Finance Act 2009, for the late filing of a tax return as the notice to file was not signed by an "Officer of the Board" and in any event, the notice was invalid as it was not given by HMRC for the purpose(s) set out in section 8, Taxes Management Act 1970 (TMA) and therefore any penalties issued for late filing of the return were invalid.
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