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Looney – Termination payments were trading receipts
In Kieran Looney & Anor v HMRC [2020] UKUT 0119 (TCC), the Upper Tribunal (UT) has dismissed an appeal against the First-tier Tribunal's (FTT) decision that a termination payment and other payments made under a contract entered into by a partnership to provide management training, were trading receipts of a partnership.
Read moreCoyle – Upper Tribunal refuses permission to appeal out of time
In Michael Coyle t/a Coyle Transport v HMRC [2020] UKUT 0113 (TCC), the Upper Tribunal (UT) set aside the decision of the First-tier Tribunal (FTT) for errors of law, but reached the same conclusion as the FTT and refused the taxpayer permission to appeal out of time.
Read moreDavies – Taxpayers unable to benefit from motive exemption in TOAA or qualify for treaty relief
In Andrew Davies & Others v HMRC [2020] UKUT 67 (TCC), the Upper Tribunal (UT) held that the taxpayers did not satisfy the ‘motive exemption’ in the transfer of assets abroad (TOAA) legislation and could not benefit from treaty relief.
Read moreZipvit – Supreme Court considers deduction of input VAT on supplies mistakenly treated as VAT exempt
In Zipvit Ltd v HMRC [2020] UKSC 15, the Supreme Court referred questions to the Court of Justice of the European Union (CJEU) regarding the correct interpretation of Article 168 of the Principal VAT Directive, in connection with the question of whether a recipient of postal services may deduct input VAT in relation to those supplies, where both parties and HMRC had mistakenly treated the supplies as exempt from VAT.
Read moreCOVID-19 – Now is not the time for businesses to be complacent
On 31 March 2020, the Crown Prosecution Service (CPS) and National Police Chiefs' Council (NPCC) issued guidance(1) on how investigators and prosecutors are proposing to tackle the issuing of new criminal proceedings during 'an unprecedented crisis for the Criminal Justice System in the UK.
Read moreHiggs – FTT lacks jurisdiction to disapply the PAYE Regulations
In Philip Higgs and Others v HMRC [2020] UKFTT 117 (TC), the First-tier Tribunal (FTT) determined that it did not have jurisdiction to determine whether HMRC is entitled to exercise a discretion under section 684(7A), ITEPA, to disapply the PAYE Regulations.
Read moreCOVID-19: Your workforce – furloughing - act to mitigate the risk of exposure to tax evasion offences as scheme could be open to abuse
Jim Harra, Chief Executive at HMRC, has informed a Treasury Committee meeting that he expects the government's multi-billion pound employee furlough scheme to be targeted by criminals seeking to exploit the £60 billion pledged in Chancellor Rishi Sunak's unprecedented Coronavirus protection package.
Read moreCOVID-19 and tax residence
This blog considers the potential risks posed by the COVID-19 pandemic to maintaining offshore tax structures.
Read moreFisher – TOAA rules not applicable to sale of business from a UK company to a Gibraltar company
In S Fisher and Others v HMRC [2020] UKUT 62 (TCC), the Upper Tribunal (UT) allowed the taxpayers' appeals and held that the transfer of assets abroad rules did not apply to the sale of a business from a UK company to a Gibraltar company, which was under the control of the same directors and shareholders.
Read moreBooth – Penalty appeal struck out
In CF Booth Ltd v HMRC [2020] UKFTT 35 (TC), the First-tier Tribunal (FTT) struck out the taxpayer's appeal against penalties imposed for deliberate inaccuracies in its VAT returns, on the basis that the appeal amounted to an 'abuse of process'.
Read moreCredit Suisse: Appeal allowed as HMRC had failed to open a valid enquiry
In Credit Suisse Securities (Europe) Ltd and others v HMRC [2020] UKFTT 86 (TC), the First-tier Tribunal (FTT) allowed a company's appeal against a closure notice on the grounds that HMRC had not issued a valid notice of enquiry.
Read moreMcMillan – Gambling proceeds not taxable income
In McMillan v HMRC [2020] UKFTT 0082 (TC), the First-tier Tribunal (FTT) held that proceeds of gambling were not taxable income.
Read moreAria Technology – No specific form required for notification of assessment of VAT
In Aria Technology Ltd v HMRC [2020] EWCA Civ 182, the Court of Appeal confirmed that there is no particular form or formality required of an assessment under section 73(1), Value Added Tax Act 1994 (VATA) and an assessment can be contained in more than one document as long as the minimum requirements are set out in a clear and unambiguous way.
Read moreLinpac – Tribunal confirms that EU group relief claims did not replace earlier domestic claims to relief
In Linpac Group Holdings Ltd v HMRC [2020] UKFTT 60 (TC), the First-tier Tribunal (FTT) allowed an appeal against an HMRC decision that the taxpayer's claim for group relief had been withdrawn by a subsequent claim.
Read moreMXC Dunlin – Interest due on repayments of tax paid in the 1980s
In MCX Dunlin (UK) Ltd v HMRC [2020] EWHC 11 (Ch), the High Court has held that interest was due on repayments of liabilities to petroleum revenue tax (PRT) dating from the 1980s, which had been met by crediting advance PRT (APRT).
Read moreCorporate failure to prevent tax evasion update – a policy is not enough
It is no secret that the government has a laser focus on making corporates pay for their roles in "facilitating" tax evasion. Recent figures show that HMRC are serious in their drive to hold companies responsible for tax evasion; even companies with seemingly watertight procedures are susceptible. Now is the time to ensure that your regimes are watertight.
Read moreSnow Factor – Tribunal applies Halifax principle to redefine supplies of winter sports training
In Snow Factor Ltd and Snow Factor Training Ltd v HMRC [2019] UKFTT 0664 (TC), the First-tier Tribunal (FTT) found that certain VAT arrangements were abusive within the scope of the Halifax principle, and redefined supplies of winter sports training by a non-profit making company as a supply by its profit making parent and therefore as falling outside the education exemption in Item 1, Group 6, Schedule 9, Value Added Tax Act 1994 (VATA).
Read moreCharnley - Tribunal puts HMRC out to pasture in allowing business and agricultural relief
In W Charnley and M Hodgkinson as executors of the estate of Thomas Gill (deceased) v HMRC [2019] UKFTT 0650 (TC), the First-tier Tribunal (FTT) confirmed that inheritance tax agricultural property relief (APR) and business property relief (BPR) was available in relation to Mr Gill's estate.
Read moreDevon Waste Management – Waste firms win appeal in landfill 'fluff' case
In Devon Waste Management Ltd and Others v HMRC [2020] UKUT 1 (TCC), the Upper Tribunal (UT) has held that the disposal of certain waste materials did not attract a charge to landfill tax.
Read moreLloyd-Webber – capital gains losses allowed over properties which were never completed
In Lloyd-Webber and another v HMRC [2019] UKFTT 717 (TC), the First-tier Tribunal (FTT) has held that a payment made under a contract for the acquisition of land was for the acquisition of contractual rights, rather than for the land, giving rise to an allowable loss on termination of the contract.
Read moreSSE Generation – UT considers the meaning of structure for the purposes of capital allowances
In HMRC v SSE Generation Ltd [2019] UKUT 332 (TCC), the Upper Tribunal (UT) dismissed HMRC's appeal against the decision of the First-tier Tribunal (FTT) that the taxpayer was eligible for capital allowances in relation to certain expenditure it incurred in connection with the construction of the Glendoe Hydro Electric Power Scheme.
Read moreTaylor Pearson – input tax on fees incurred in implementing a tax scheme
In Taylor Pearson (Construction) Limited v HMRC [2019] UKFTT 691 (TC), the First-tier Tribunal (FTT) has held that input tax on fees incurred in implementing a tax scheme, intended to remunerate directors in a tax efficient manner, was deductible.
Read moreHiggins – for the purposes of PPR relief "period of ownership" starts on completion
In Desmond Higgins v HMRC [2019] EWCA Civ 1869, the Court of Appeal has held that the date of acquisition of an off-plan property for the purposes of principal private residence relief (PPR) was the date of completion and not the date of exchange of contracts.
Read moreJafari – HMRC criticised for breach of its duty to assist the Tribunal
In Jafari v HMRC [2019] UKFTT 692 (TC), the First-tier Tribunal (FTT) criticised HMRC for failing in its duty to bring relevant authorities to its attention.
Read moreContentious tax quarterly review (Q4 2019)
In this quarterly review we consider: HMRC’s increasing propensity to seek to strike out the taxpayer’s case; recent developments in relation to IR35; the timing of tribunal decisions; and the potential implications of the Inverclyde decision.
Read moreKnibbs – HMRC's challenge to carry-back loss relief claims was correct
In Knibbs and ors v HMRC and R (oao Astley and ors) v HMRC [2019] EWCA Civ 1719, the Court of Appeal has held that Schedule 1B, Taxes Management Act 1970 (TMA) can apply to a claim for carry-back loss relief.
Read moreLocke – Court of Appeal quashes follower and accelerated payment notices
In R (on the application of Locke) v HMRC [2019] EWCA Civ 1909, the Court of Appeal quashed follower and accelerated payment notices issued to a participant in a film finance partnership, because HMRC had been wrong in considering that a judicial ruling was relevant to the arrangements under consideration.
Read moreCoal Staff Superannuation Scheme – Taxation of manufactured overseas dividends breached EU law
In HMRC v Coal Staff Superannuation Scheme Trustees Ltd [2019] EWCA Civ 1610, the Court of Appeal dismissed HMRC's appeal and held that the imposition of withholding tax on manufactured overseas dividends was contrary to EU law.
Read moreAozora GMAC Investment Ltd – HMRC did not breach a taxpayer's legitimate expectation
In R (oao Aozora GMAC Investment Ltd) v HMRC [2019] EWCA Civ 1643, the Court of Appeal has dismissed the taxpayer's claim that a statement in HMRC’s International Manual created a legitimate expectation, because the taxpayer had not relied on it substantively and, even if it had done, there was insufficient "unfairness" in frustrating the taxpayer's expectation.
Read moreFirst Choice – HMRC ordered to pay taxpayer's costs as a result of its unreasonable behaviour
In First Choice Recruitment Ltd v HMRC [2019] UKFTT 412 (TC), the First-tier Tribunal (FTT) held that the taxpayer was entitled to its costs because HMRC had acted unreasonably.
Read moreCliff: Tax tribunal considers the meaning of ‘deliberate’
In Cliff v HMRC [2019] UKFTT 564, the First-tier Tribunal (FTT) has held that the taxpayer had 'deliberately' submitted an inaccurate return to HMRC.
Read morePertemps – Upper Tribunal provides guidance on salary sacrifice arrangements
In HMRC v Pertemps Ltd [2019] UKUT 234 (TCC), the Upper Tribunal (UT) has provided helpful guidance on salary sacrifice arrangements and their effectiveness.
Read morePotter – Tribunal considers the meaning of "trading company" in the context of entrepreneurs' relief
In Jacqueline Potter and Neil Potter v HMRC [2019] UKFTT 0554 (TC), the First-tier Tribunal (FTT) has confirmed that the owners of a company were entitled to entrepreneurs relief (ER) as the activities of the company amounted to trading.
Read moreLeeds Cricket Football & Athletic Co Ltd – business with attached goodwill disposed of
In The Leeds Cricket Football & Athletic Company Ltd v HMRC [2019] UKFTT 0568 (TC), the First-tier Tribunal (FTT) has held that the freehold in a cricket ground involved the disposal of a business with attached goodwill and was not simply a disposal of land with attached income streams.
Read moreJJ Management: No need to stand on formalities
It would appear from the decision of the High Court in R (oao JJ Management LLP and Ors) v HMRC [2019] EWHC 2006 (Admin), that HMRC can conduct informal enquiries outside of section 9A, Taxes Management 1970 (TMA).
Read moreRialas – Transfer of assets abroad provisions did not apply
In Rialas v HMRC [2019] UKFTT 520, the First-tier Tribunal (FTT) has found that the transfer of assets abroad (TOAA) provisions, originally contained in section 739 et seq, Income and Corporation Taxes Act 1988 (ICTA) did not apply.
Read moreDraft Finance Bill 2019/20: HMRC’s new insolvency powers
Piercing the corporate veil? Robert Waterson and Constantine Christofi review the draft provisions that will empower HMRC to issue joint liability notices. (This article was originally posted on Tax Journal)
Read moreQuentin Skinner – shares sold by trust eligible for entrepreneurs' relief
In The Quentin Skinner 2008 Settlement L and others v HMRC [2019] UKFTT 516 (TC), the First-tier Tribunal (FTT) has held that for a trust to qualify for entrepreneurs' relief (ER) on a disposal of shares, it was not necessary for the trust's beneficiary to have had an interest in possession in the shares for the period prescribed in section 169J(4), Taxation of Chargeable Gains Act 1992 (TCGA).
Read moreContentious tax: quarterly review (Q3 2019)
In this quarterly review, Adam Craggs and Michelle Sloane consider HMRC’s increasing propensity to seek the production of documents from accountants and other professional advisers, HMRC’s new policy of challenging taxpayers’ loan relationships, and the increase in the number of domicile enquiries launched by HMRC.
Read moreTinkler - Notice of enquiry invalid
In Tinkler v HMRC [2019] EWCA Civ 1392, the Court of Appeal has allowed the taxpayer's appeal and held that HMRC's notice of enquiry under section 9A, Taxes Management Act 1970 (TMA), was invalid.
Read moreSmart & Son - Supreme Court confirms VAT incurred on funds raised for business purpose was recoverable
In HMRC v Frank A Smart & Son [2019] UKSC 39, the Supreme Court has held that a farming company was entitled to repayment of input VAT charged on its acquisition of single farm payment entitlement units which were related to its overall economic activities and future taxable supplies.
Read moreLevy – Tribunal rejects application for final and partial closure notices
In The Executors of Mrs R W Levy v HMRC [2019] UKFTT 418 (TC), the First-tier Tribunal (FTT), has held that HMRC was not in a position to issue either a final or partial closure notice.
Read moreANO - pre-ordained transactions avoided CGT losses being caught by pre-entry loss rules
In ANO (No1) Limited v HMRC [2019] UKFTT 406 (TC), the First-tier Tribunal (FTT) has held that a pre-ordained series of transactions implemented to avoid the application of Schedule 7A, Taxation of Chargeable Gains Act 1992 (TCGA) to pre-entry losses were effective.
Read moreInverclyde – Enquiry into LLP returns invalid as opened under incorrect statutory provisions
In Inverclyde and another v HMRC [2019] UKFTT 0408 (TC), the First-tier Tribunal (FTT) has held that enquiries opened, and closure notices issued, to limited liability partnerships (LLPs) were invalid as HMRC should have enquired into the LLPs returns under paragraph 24, Schedule 18, Finance Act 1998 (FA 1998) and not section 12AC, Taxes Management Act 1970 (TMA).
Read moreCorrado – 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.
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