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HMRC 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.
Read moreBradshaw – Tribunal confirms ignorance of the law is a reasonable excuse and cancels penalties
In A and R Bradshaw v HMRC [2018] UKFTT 0368 (TC), the First-tier Tribunal (FTT) has held that a taxpayer's ignorance of the law is a reasonable excuse in relation to the late filing of a non-resident CGT return (NRCGT return).
Read moreShaw: Tribunal cancels penalties … again!
In Shaw v HMRC [2018] UKFTT 0381 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties because HMRC had not satisfied the statutory requirements of section 8(1), Taxes Management Act 1970 (TMA) as a notice to file had not been validly served on the appellant.
Read moreTager – Court of Appeal allows taxpayers' appeals and reduces penalties for failure to comply with information notices
In Tager & Ors v HMRC [2018] EWCA Civ 1727, in allowing the taxpayers' appeals, the Court of Appeal has provided some general observations on the scope and purpose of HMRC's power to impose tax-related penalties under paragraph 50, Schedule 36, Finance Act 2008 for failures to comply with information notices issued under paragraph 1, Schedule 36, Finance Act 2008.
Read moreAllpay - Tribunal refuses HMRC permission to amend its Statement of Case and awards costs to the taxpayer
In Allpay Ltd v HMRC [2018] UKFTT 0273 (TC), the First-tier Tribunal (FTT) has dismissed HMRC's application to amend its Statement of Case to plead a new legal issue.
Read moreAmes: No EIS relief without income tax claim but Tribunal grants judicial review of HMRC's decision
In Ames v HMRC [2018] UKUT 190, the Upper Tribunal (UT) has held that capital gains tax (CGT) relief under the Enterprise Investment Scheme (EIS) is not available on the disposal of shares where no income tax relief was claimed on their acquisition. However, in refusing to allow a late claim for EIS income tax relief, HMRC had misapplied the relevant guidance, fettered its discretion, and failed to consider material facts and the UT therefore granted judicial review of HMRC's decision.
Read moreBell - The importance of selecting the correct forum when alleging unfairness on the part of HMRC
In J Bell v HMRC [2018] UKFTT 261 (TC), the taxpayer's appeal was struck out by the First-tier Tribunal (FTT), because it does not have jurisdiction to consider issues of public law.
Read moreProject Blue - Supreme Court allows HMRC's appeal in SDLT sub-sale case
In Project Blue Limited v HMRC [2018] UKSC 30, the Supreme Court (by a majority) has found that section 75A, Finance Act 2003 (an anti-avoidance provision), was applicable resulting in SDLT being payable notwithstanding that sections 45 (sub-sale relief) and 71A (exemption for alternative property finance) Finance Act 2003, would have otherwise resulted in no stamp duty land tax (SDLT) being payable.
Read moreBayonet Ventures: Loan by pension scheme was not an unauthorised payment
In Bayonet Ventures LLP & Anor v HMRC [2018] UKFTT 262 (TC), the First-tier Tribunal (FTT), has held that a loan made to a limited liability partnership (LLP) by a pension scheme in which one of the partners of the LLP was a member, was not an unauthorised payment (section 164, Finance Act 2004) and should not be treated as a loan to the partner (section 863, Income Tax (Trading and Other Income) Act 2005 (ITTOIA)) as section 863 only applies if the LLP is carrying on a 'trade, profession or business with a view to profit', which it was not.
Read moreAnderson - Upper Tribunal considers knowledge test for the purpose of discovery assessments
In Jerome Anderson v HMRC [2018] UKUT 159 (TC), the Upper Tribunal (UT) has dismissed a football agent's appeal upholding the First-tier Tribunal's (FTT) decision to disallow relief for losses incurred in relation to a football academy ran by the agent. The UT also agreed with the FTT that HMRC had issued a valid discovery assessment.
Read moreDundas: out of time capital allowance claims become valid due to HMRC opening enquiries
In Dundas Heritable Limited v HMRC [2018] UKFTT 0244 (TC), the First-tier Tribunal (FTT) has held that a taxpayer was entitled to make, what would otherwise have been out of time capital allowance claims, as a result of HMRC opening enquiries.
Read moreInvestec: payments to acquire partnership interests were trading in nature
In HMRC v Investec Asset Finance Plc and Another [2018] UKUT 0069 (TCC), the Upper Tribunal (UT) has held that payments made to acquire partnership interests are deductible in calculating the profits of the partners’ solo trades of dealing in those partnership interests.
Read morePatel: Enquiry and closure notices held to be invalid
In Patel & Anor v HMRC [2018] UKFTT 0185 (TC), the First-tier Tribunal ('FTT'), in finding in favour of the taxpayers at a preliminary hearing, has held that HMRC had not opened valid enquiries into the taxpayers' self-assessment returns, as the returns had not been made pursuant to a notice issued by HMRC under section 8(1) Taxes Management Act 1970 ('TMA').
Read moreCustoms and excise quarterly update
In this update we report on the government’s consultation on Gaming Duty Accounting Periods; the Licensing of Tobacco Manufacturing Machinery; and the European Commission’s consultation on amendments to guarantees. We also comment on three recent cases involving customs classification; excise duty drawback; and excise duty liability on persons with no actual or constructive knowledge of unpaid duty.
Read moreTooth – discovery assessment invalid as no inaccuracy in return
In HMRC v Tooth [2018] UKUT 38, the Upper Tribunal (UT) has concluded that a discovery assessment issued by HMRC was invalid as the taxpayer's self-assessment did not contain an inaccuracy and in any event there was no deliberate intent by the taxpayer to bring about an insufficiency of tax.
Read moreMDCM Ltd - Tribunal confirms that IR35 does not apply in employment status case
In MDCM Ltd v HMRC [2018] TC 6400, the First-tier Tribunal (FTT) has allowed the taxpayer's appeal, concluding that its contractual arrangements were such that its principal employee was not an employee of the ultimate contracting company, for the purposes of IR35.
Read moreSippchoice Ltd: Taxpayer can claim income tax deduction for contribution in specie to SIPP
In Sippchoice Ltd v HMRC [2018] UKFTT, the First-tier Tribunal (FTT) has held that a taxpayer can obtain tax relief at source in respect of contributions made to s Self-Invested Pension Plan (SIPP) settled in the form of unquoted shares.
Read moreOnillon – Failure to take Follower Notice 'corrective action' reasonable in all the circumstances
In Onillon v HMRC [2018] UKFTT 33 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against a penalty imposed for failing to take corrective action following the issue of a Follower Notice (FN) as it was reasonable in all the circumstances for the taxpayer not to take such action.
Read moreHargreaves: Loyalty pays
In Hargreaves Lansdown Asset Management LTD v HMRC [2018] UKFTT 127 (TC) TC06383, the First-tier Tribunal (FTT) has found that loyalty bonus payments paid to investors were not "annual payments" for the purpose of section 683, ITTOIA.
Read moreVolkswagen: CJEU provides guidance on the time limit for input VAT recovery
In Volkswagen AG v Finančné riaditeľstvo Slovenskej republiky C-533/16, the Court of Justice of the European Union (CJEU) has held that Member States cannot impose a time limit on input tax recovery that denies claims before the taxable person is in a position to exercise its right to recover.
Read moreJackson : HMRC penalised in penalties case
In Jackson v HMRC [2018] UKFTT 0064 (TC), the First-tier Tribunal (FTT) has held that HMRC had misapplied the law in respect of penalties it had issued to the taxpayer for filing late returns.
Read moreHicks: Discover the limits
In J Hicks v HMRC [2018] UKFTT 22, the First-tier Tribunal (FTT), in allowing the taxpayer's appeal, has held that discovery assessments issued by HMRC were invalid as the condition contained in section 29(5), TMA 1970, was not satisfied.
Read moreTaylor Wimpey – Upper Tribunal clarifies the application of the 'builder's block' scheme
In Taylor Wimpey Plc v HMRC [2018] UKUT 55, the Upper Tribunal (UT) has allowed in part the taxpayer's appeal in relation to its claim to recover input VAT incurred on the provision of certain white goods, kitchen appliances and carpets installed in newly built houses.
Read moreTowers Watson – Tribunal confirms HMRC cannot raise new matters not covered in a closure notice
In Towers Watson Limited v HMRC [2017] TC06241, the First-tier Tribunal (FTT) has held that HMRC cannot raise new matters which were not covered in the closure notice which it had issued to the appellant company.
Read moreGoldsmith - late filing penalties cancelled by the Tribunal
In David Goldsmith v HMRC [2018] UKFTT 0005 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties issued to the taxpayer as the statutory requirements in section 8(1), Taxes Management Act 1970 (TMA), had not been satisfied and HMRC did not have the power to require the taxpayer to deliver self-assessment returns.
Read moreRowe and Vital Nut – Court of Appeal delivers its judgments in APN judicial review challenge
In Rowe and Vital Nut, the Court of Appeal has dismissed the claimant taxpayers' appeals in judicial review proceedings challenging the legality of Accelerated Payment Notices (APNs) and Partner Payment Notices (PPNs).
Read moreStadion - CJEU confirms circumstances where different elements of a supply can be taxed at different rates
In Stadion Amsterdam CV v Staatssecretaris van Financiën C-463/16, the Court of Justice of the European Union (CJEU) has confirmed that, in the absence of specific statutory language to the contrary, a single supply, which includes two individually priced elements, is taxable at the rate of the principle supply.
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