Category: Income Tax

Fleming (Representative Partner of Paul Kingston Furniture) v Revenue and Customs: FTTTx 25 Feb 2010

FTTTx Income tax – late submission of partnership return – fixed penalty – whether capped at zero as a result of nil tax liability – no – whether reasonable excuse because HMRC had remitted such penalties for another taxpayer in similar circumstances – no – whether late issue of penalty to co-partner vitiates penalty – no – whether late-discovered requirement to acquire extra software at some expense in order to achieve online filing amounts to reasonable excuse for late paper filing – no – whether appeal should be allowed as a result of late filing of HMRC’s statement of case – no – whether Appellant’s or her co-partner’s medical condition gave rise to a reasonable excuse – on the evidence provided – no.

Citations:

[2010] UKFTT 94 (TC)

Links:

Bailii

Income Tax

Updated: 17 August 2022; Ref: scu.408923

Express Agency v Revenue and Customs: FTTTx 3 Feb 2010

FTTTx INCOME TAX – late filing of partnership return – penalties – reasonable excuse – HMRC excusing late filing in another similar case justifies excuse in this case – s93A(6) TMA 1970 – no reasonable excuse found on the facts – appeal dismissed

Citations:

[2010] UKFTT 55 (TC)

Links:

Bailii

Statutes:

Taxes Management Act 1970 93A(6)

Income Tax

Updated: 17 August 2022; Ref: scu.408922

Radford and Robinson v Revenue and Customs: FTTTx 14 Jan 2010

GROSS PAYMENT STATUS – Compliance test – Cancellation – non compliance by one of partners with personal tax liabilities – whether reasonable excuse – no. Whether notice of failures given sufficient – no, whether notice given with out delay – no. Appeal allowed

Citations:

[2010] UKFTT 31 (TC)

Links:

Bailii

Construction, Income Tax

Updated: 17 August 2022; Ref: scu.408904

Thresh v Revenue and Customs: FTTTx 13 Jan 2010

FTTTx INCOME TAX – ‘general earnings’ within the charge to income tax under s.6 ITEPA – whether the transfer of a cottage to the Appellant at an undervalue constituted a profit of the Appellant’s office or employment with his building company as being a transfer at an undervalue which was ‘money’s worth’ within s.62(3) ITEPA – found on the facts that the transfer was made under an arrangement carried out by the Appellant with the company in his individual capacity and not as a director or employee pursuant to which he would personally contribute one half the development costs of the project in question in return for one of the two cottages which the company would otherwise have retained as its reward for the project – decision in principle in favour of the Appellant

Judges:

John Walters QC

Citations:

[2010] UKFTT 29 (TC)

Links:

Bailii

Income Tax

Updated: 17 August 2022; Ref: scu.408908

Icebreaker 1 Llp v Revenue and Customs: FTTTx 5 Jan 2010

FTTTx Income Tax – Claim by an LLP to have incurred trading losses in relation to its trade of distributing films – Whether circular payments resulted in expenditure ‘not having been incurred’ – whether payments were deductible as trading expenses – whether part or all of any payments were capital payments – whether those payments that were deductible were deductible in the LLP’s first period of account or whether payments made in that period included pre-payments – Issues in relation to the Closure Notice – Appeal substantially dismissed

Citations:

[2010] UKFTT 6 (TC

Links:

Bailii

Income Tax

Updated: 17 August 2022; Ref: scu.408891

First Nationwide v Revenue and Customs: FTTTx 12 Jan 2010

FTTTx Stocklending agreement – deduction for management expenses in respect of manufactured dividends – para 1(1), Sch 23A ICTA – Income Tax (Manufactured Overseas Dividends) Regulations 1993 – whether dividends paid by a Cayman Islands company out of share premium account are ‘dividends’ and ‘overseas dividends’ – ss 737A and 730A ICTA – whether a sale of preference shares and a subscription for preference shares is a sale and repurchase of securities

Citations:

[2010] UKFTT 24 (TC)

Links:

Bailii

Statutes:

Income Tax (Manufactured Overseas Dividends) Regulations 1993

Income Tax

Updated: 17 August 2022; Ref: scu.408883

Frossell v Revenue and Customs: FTTTx 22 Jan 2010

Self assessment -Appeal against daily penalties charged for apparent non submission of returns – whether reasonable excuse for non receipt of returns – whether penalty excessive and whether penalty proportionate to tax liability – Taxes Management Act 1970 Section 100B (2)(iii)

Citations:

[2010] UKFTT 80 (TC)

Links:

Bailii

Statutes:

Taxes Management Act 1970

Jurisdiction:

England and Wales

Income Tax

Updated: 17 August 2022; Ref: scu.408885

Flaxmode Ltd v Revenue and Customs: FTTTx 13 Jan 2010

FTTTx INCOME TAX-PENALTY-Failure to produce documents in accordance with section 19 TMA 1970 order – daily penalties imposed under section 97AA(1)(b)TMA 1970 – was the penalty a criminal charge within the meaning given by Strasbourg cases – no – was article 6(3)(a) ECHR engaged – no – did the penalty determination comply with section 100 TMA 1970 – yes – did the Appellant have a reasonable excuse – No – Appeal dismissed

Judges:

Michaell Tildesley

Citations:

[2010] UKFTT 28 (TC)

Links:

Bailii

Statutes:

Taxes Management Act 1970 19 97AA(1)(b), European Convention on Human Rights 6(3)(a)

Income Tax, Taxes Management, Human Rights

Updated: 17 August 2022; Ref: scu.408884

Blakiston v Cooper (Surveyor of Taxes): HL 10 Dec 1908

Whether or not a sum given by parishioners and others to the vicar at Easter, 1905, is assessable to income tax as being ‘profits accruing’ to him ‘by reason of such office.’
Sums of money collected in a parish by voluntary subscription in order to augment the stipend of a clergyman, when there is a continuity of annual payments to him from such sources apart from any special occasion, are profits accruing to him by reason of is office, and are therefore assessable to income tax
The fact that bonuses were voluntary on the part of the employer is irrelevant so long as the sum of money is given in respect of the employee’s work as an employee

Judges:

Lord Chancellor (Loreburn), Lords Ashbourne, Robertson, and Collins

Citations:

[1908] UKHL 1, (1909) STC 347, [1909] AC 104, [1908] UKHL TC – 5 – 347, [1908] UKHL 1023, 46 SLR 1023

Links:

Bailii, Bailii, Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 16 August 2022; Ref: scu.265969

Tennant v Smith (Surveyor of Taxes): HL 14 Mar 1892

A Montrose bank manager had been given free accommodation in a bank house which he was required to occupy.
Held: The Inland Revenue could not charge income tax on the value of the accommodation because the employee could not convert the benefit into money. Emoluments were confined to actual money payments and to benefits in kind which were capable of being turned into money by the recipient
Income Tax. Official Residence. Emoluments. Total income from all sources. A banking company assigns to its agent as a residence a portion of the bank premises occupied by them in respect of which they are assessed to Income Tax under Schedule A. The agent is required to reside in the building as the servant of the bank, and for the purpose of performing the duty which he owes to his employers. Held, That the value of the residence is not an emolument of office in respect of which the agent is chargeable with Income Tax; and is not to be included in estimating the total amount of the agent’s income for the purposes of a claim of abatement.

Citations:

[1892] UKHL 1, [1892] AC 150, [1892] UKHL 492, [1892] UKHL TC – 3 – 158, 3 TC 158

Links:

Bailii, Bailii, Bailii

Jurisdiction:

Scotland

Cited by:

Cited – Revenue and Customs v Forde and McHugh Ltd SC 26-Feb-2014
The Court heard a number of appeals concerned with the interpretation of the phrase in section 6(1) of the Social Security Contributions and Benefits Act 1992, ‘[w]here in any tax week earnings are paid to or for the benefit of an earner’ It was . .
Cited – Abbott v Philbin (Inspector of Taxes) HL 21-Jun-1960
A company’s senior employees had been given an option to subscribe for its shares at the then current market price, the option being exercisable at any time within the next ten years. The employees were thus incentivised to increase the company’s . .
Cited – Heaton v Bell HL 1970
The Revenue sought to tax the benefit of a car loan scheme and the issue was whether the emoluments of a participating employee fell to be assessed under Schedule E gross without reference to the weekly sum deducted by the employer for providing, . .
Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 16 August 2022; Ref: scu.263831

Abbott v Philbin (Inspector of Taxes): HL 21 Jun 1960

A company’s senior employees had been given an option to subscribe for its shares at the then current market price, the option being exercisable at any time within the next ten years. The employees were thus incentivised to increase the company’s prosperity. The option was non-transferable and would expire on the employee’s death or retirement.
Held: Income tax was chargeable on the realisable monetary value of the option at the date of its acquisition, rather than on the value realised when it was subsequently exercised.
Viscount Simonds said that the test was whether the chattel or right ‘was by its nature capable of being turned into money.’
Lord Radcliffe discussed employee benefits in the form of share options: ‘I think that the conferring of a right of this kind as an incident of service is a profit or perquisite which is taxable as such in the year of receipt, so long as the right itself can fairly be given a monetary value, and it is no more relevant for this purpose whether the option is exercised or not in that year, than it would be if the advantage received were in the form of some tangible form of commercial property.’
Lord Reid said: ‘I can sum up my view by saying that conditions and restrictions attached to or inherent in an option may affect its value, but are only relevant on the question whether the option is a perquisite if they would in law or in practice effectively prevent the holder of the option from doing anything when he gets it which would turn it to pecuniary account.’

Judges:

Viscount Simonds, Lord Reid, Lord Radcliffe, Lord Keith of Avonholm, Lord Denning

Citations:

[1960] UKHL 1, [1961] AC 352, [1960] UKHL TC – 39 – 82

Links:

Bailii, Bailii

Statutes:

Income Tax Act 1952 Sch E

Jurisdiction:

England and Wales

Citing:

Cited – Tennant v Smith (Surveyor of Taxes) HL 14-Mar-1892
A Montrose bank manager had been given free accommodation in a bank house which he was required to occupy.
Held: The Inland Revenue could not charge income tax on the value of the accommodation because the employee could not convert the . .

Cited by:

Cited – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Cited – Revenue and Customs v Forde and McHugh Ltd SC 26-Feb-2014
The Court heard a number of appeals concerned with the interpretation of the phrase in section 6(1) of the Social Security Contributions and Benefits Act 1992, ‘[w]here in any tax week earnings are paid to or for the benefit of an earner’ It was . .
Cited – Shop Direct Group v Revenue and Customs SC 17-Feb-2016
The Court considered the interpretation of the sections which applied corporation tax to post-cessation receipts. Companies had received from the Inland Revenue substantial repayments of VAT together with interest. There had been reorganisations of . .
Cited – UBS Ag and Another v Revenue and Customs SC 9-Mar-2016
UBS AG devised an employee bonus scheme to take advantage of the provisions of Chapter 2 of the 2003 Act, with the sole purpose other than tax avoidance, and such consequential advantages as would flow from tax avoidance. Several pre-ordained steps . .
Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 16 August 2022; Ref: scu.248537

Dextra Accessories Ltd and others v Inspector of Taxes: SCIT 25 Jul 2002

SXIT EMPLOYEE BENEFIT TRUST – whether deduction of contributions postponed until taxable as emoluments under FA 1989 s.43(11) – no – whether sub-funds in favour of directors who controlled the company taxable as emoluments on Ramsay principles or as a benefit in kind under TA 1988 s.154 – no — whether loans to directors taxable as emoluments – no
Funds were held by trustees ‘with a view to becoming relevant emoluments’ only if the purpose of the contributing company was that they should be used to pay emoluments. In this case, the terms of the trust deed showed that the contributing companies had other purposes as well.

Judges:

Dr Avery Jones CBE

Citations:

[2002] UKSC SPC00331, [2002] STC (SCD) 413

Links:

Bailii

Statutes:

Finance Act 1989 43(11)

Jurisdiction:

England and Wales

Cited by:

Appeal from – MacDonald (Inspector of Taxes) v Dextra Accessories Ltd and Others ChD 16-Apr-2003
The inspector sought to disallow charging to current tax period payments made by the employer to an employee benefit trust.
Held: The payments were not made and held by the trustees ‘with a view to becoming relevant emoluments’ within the . .
At Special Commissioners – MacDonald (HM Inspector of Taxes) v Dextra Accessories Ltd and others CA 28-Jan-2004
The company had set up a trust for the benefit of its employees. The Inspector sought to tax the payments made into the trust as ’emoluments’
Held: The appeal was allowed. The payments were ‘potential emoluments’ which were held by the . .
Special Commissioners – HM Inspector of Taxes v Dextra Accessories Ltd HL 7-Jul-2005
The taxpayer companies had paid funds into a trust for employees. They sought to set off the payments against their liability to corporation tax. The revenue argued that they were deductible only in the year in which they were paid to the employees. . .
Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Corporation Tax

Updated: 16 August 2022; Ref: scu.195400

Hadlee and Another v Commissioner of Inland Revenue: PC 1 Mar 1993

(New Zealand) Section 38(2) of the Income Tax Act 1976 of New Zealand provided that income tax was payable by every person on income derived by him during the year for which tax was payable. A partner in an accountancy firm assigned a proportion of his share in the partnership to a trust under which the primary beneficiaries were his wife and child. He sought to argue that he was not liable to income tax on that proportion of his annual partnership income. The New Zealand courts rejected that contention
Held: The appeal failed. Income tax was a tax on income which was the product of the taxpayer’s personal exertion. The taxpayer was still liable to tax on his share of income of partnership even though it had been assigned.

Citations:

Gazette 05-May-1993, [1993] UKPC 8

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 16 August 2022; Ref: scu.81132

Brooke v Price: HL 26 Feb 1917

Revenue – Income Tax – Contract – Annuity Payable out of Net Income without Deduction of Income Tax – Income Tax Act 1842 (5 and 6 Vict. cap. 35), secs. 102, 103.

Judges:

Lord Chancellor (Finlay), Earl Loreburn, Lords Parker, Sumner, and Wrenbury

Citations:

[1917] UKHL 632, 54 SLR 632

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 16 August 2022; Ref: scu.630997

BW Noble Ltd v Mitchell: CA 7 Feb 1927

HMRC Income Tax, Schedule D, Case I – Business carried on abroad – Control – Profits of trade – Deduction.
Under its Articles of Association the management of a Company of insurance brokers registered in England was vested in its Board of Directors in London, with powers of delegation. One of the Directors was appointed Resident Director in France, and conducted the French business of the Company from an office in Paris under a power of attorney from the Company. He attended a few Board meetings in London, though not bound to do so. He also made some reports to the other Directors, and on one or two occasions received their concurrence with his proposals, but they did not interfere with his conduct of the French business. Separate accounts of that business were kept in Paris, but the results were incorporated in the balance sheets of the Company, though no part of the French profits was ever remitted to London.
The Company contended that the control of the Paris business was in Paris and not in London, and that the profits therefrom were accordingly not assessable to Income Tax.
The Company also claimed as a deduction from its profits for Income Tax purposes, a sum of andpound;19,200 payable (by instalments) to a retiring Director in the following circumstances.
The original Directors were appointed for life so long as they held a qualifying number of shares, subject to dismissal forthwith for neglect or misconduct towards the Company. A Director so dismissed was only entitled to receive Jus salary then due and could be required to sell his shares to the other Directors at par. He would also have to surrender for cancellation certain notes issued by the Company entitling him to participate in surplus profits.
Circumstances arose in 1920 and 1921 in which the Company might possibly have been justified in dismissing one of the Directors, but, to avoid publicity injurious to the Company’s reputation, it entered into negotiation with him for his retirement He claimed andpound;50,000 compensation, but a compromise was arrived at and embodied in an agreement dated the 30th December, 1921, by which he agreed to retire from the Company, to transfer his 300 andpound;1 shares to the other Directors at par value (they were then worth considerably more) and to surrender his participating notes. The Company agreed to pay him andpound;19,200, and the Directors to pay him andpound;300 (expressed to be consideration for his shares), making together andpound;19,500 (payable in five annual instalments), which he agreed to accept in full satisfaction of all claims against the Company or the Directors.
The Special Commissioners on appeal decided against the Company on the question of the control of the French business, but in their favour on the question of the deduction of the said sum of andpound;19,200. A Case for the opinion of the High Court was demanded both by the Company and by the Crown.
Held: (1) that the control of the Company’s Paris business was with the Board of Directors in London, that their authority was not divested by the power of attorney to the Paris Director, and that the Company was accordingly assessable to Income Tax in respect of its Paris profits under Case I of Schedule D (Egyptian Hotels, Limited v. Mitchell, 6 T.C. 152 and 542, distinguished);
and (2) that the instalments of the sum of andpound;19,200 payable by the Company to the retiring Director under the agreement of the 30th December, 1921, were admissible deductions in arriving at its profits for Income Tax purposes.

Judges:

Lord Hanworth MR, Sargant, Lawrence LLJ

Citations:

[1927] EWCA Civ 1, [1927] 11 TC 372, [1927] 1 KB 719, (1927) 11 Tax Cas 372, (1927) 34 TR 2004/15

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 15 August 2022; Ref: scu.403319

Brumby (Inspector of Taxes) v Milner: HL 27 Oct 1976

A company had a profit-sharing scheme for its employees. When it decided to merge with a larger company, the trustees concluded that the scheme was no longer viable. They wound it up and distributed the funds among the employees.
Held: The distributions to the employees were taxable as profits from employment.
Lord Kilbrandon rejecting an argument that the payment had nothing to do with employment. He said: ‘Certainly the money forming the payment became available in consequence of certain events and decisions connected with the structure of the company. But the sole reason for making the payment to the [taxpayer] was that he was an employee, and the payment arose from his employment. It arose from nothing else, as it would have done, if for example, it had been made to an employee for some compassionate reason.’

Judges:

Lord Wilberforce, Lord Diplock, Lord Simon of Glaisdale, Lord Kilbrandon, Lord Edmund-Davies

Citations:

[1976] UKHL 7, [1976] 3 All ER 636, [1976] 1 WLR 1096

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – RFC 2012 Plc (Formerly The Rangers Football Club Plc) v Advocate General for Scotland SC 5-Jul-2017
The Court was asked whether an employee’s remuneration is taxable as his or her emoluments or earnings when it is paid to a third party in circumstances in which the employee had no prior entitlement to receive it himself or herself.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 15 August 2022; Ref: scu.248619

Girvan (Inspector of Taxes) v Orange Personal Communications Services Ltd: ChD 3 Apr 1998

Interest which was retained by a bank until closure of the account under a firm arrangement to that effect was not taxable as it accrued but only when it came to be due to be paid. Income did not normally arise until it was payable.

Citations:

Gazette 20-May-1998, Times 22-Apr-1998, [1998] 70 TC 682, [1998] STC 567

Statutes:

Income and Corporation Taxes Act 1988 64 70(1)

Jurisdiction:

England and Wales

Corporation Tax, Income Tax

Updated: 14 August 2022; Ref: scu.80848

Revenue and Customs v Tower MCashback Llp 1 and Another: CA 2 Feb 2010

The taxpayer had sought to set off the entire cost of software licences against tax in the year of purchase, and challenged the re-opening of tax assessments after their closure by the Revenue. The Revenue appealed.
Held: The Revenue could re-open the assessments, but the taxpayer was able to set off the expense as a capital allowance.

Judges:

Arden, Scott Baker and Moses LJJ

Citations:

[2010] EWCA Civ 32, [2010] STC 809, [2010] BTC 154, [2010] STI 435

Links:

Bailii

Statutes:

Capital Allowances Act 2001 45, Taxes Management Act 1970

Jurisdiction:

England and Wales

Citing:

At SCIT – Tower MCashback Llp1 and Llp2 v Revenue and Customs SCIT 19-Jul-2007
SCIT Capital expenditure on software – whether HMRC can raise additional contentions in an appeal beyond those indicated in the Closure Notice – whether expenditure was incurred pursuant to an unconditional . .
Appeal from – Tower Mcashback Llp and Another v HM Revenue and Customs ChD 13-Oct-2008
The court considered the availablilty of a first year allowance for the full first year expenditure on software licence agreements. The revenue sought to bring new points on appeal.
Held: The LLPs’ appeals on the procedural issue as to the . .

Cited by:

At CA – Revenue and Customs v Tower MCashback Llp 1 and Another SC 11-May-2011
No re-opening after closure notices
The taxpayer had purchased software licences (SLA), and set out to claim the full cost against its tax liabiilities under the 2001 Act in the first year. The taxpayer said that after the Revenue had issued closure notices, it was not able to re-open . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Taxes Management

Updated: 13 August 2022; Ref: scu.396485

Huitson, Regina (on The Application of) v Revenue and Customs: Admn 28 Jan 2010

The claimant sought to challenge section 58 of the 2008 Act, which imposed retrospective liability for tax, in breach of the defendant’s human rights obligations. He worked as an IT consultant through an intermediary company in the Isle of Man whose shares he owned.
Held: The claim for a judicial review on a human rights basis was dismissed.

Judges:

Parker J

Citations:

[2010] EWHC 97 (Admin)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Shiner and Another, Regina (on The Application of) v HM Revenue and Customs CA 26-May-2010
The taxpayers challenged decisions by the Revenue to apply section 858 of the 2005 Act so as to tax income earned as UK residents but as partners in an isle of Man partnership.
Held: The claim should be reconstituted as a claim for judicial . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Human Rights

Updated: 13 August 2022; Ref: scu.396377

Cliff v Revenue and Customs (Income Tax/Corporation Tax : Losses): FTTTx 4 Sep 2019

INCOME TAX – whether the Appellant was trading commercially with a view to profit – no – whether the Appellant was entitled to trade loss relief – no – whether the Appellant acted deliberately – yes – assessments confirmed – penalties confirmed – appeal dismissed

Citations:

[2019] UKFTT 564 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 11 August 2022; Ref: scu.641362

UBS Ag and Another v Revenue and Customs: SC 9 Mar 2016

UBS AG devised an employee bonus scheme to take advantage of the provisions of Chapter 2 of the 2003 Act, with the sole purpose other than tax avoidance, and such consequential advantages as would flow from tax avoidance. Several pre-ordained steps were taken according to a detailed timetable. Once the structure of the scheme had been finalised, a brochure was sent to the employees explaining it in detail and inviting their participation. 426 employees agreed to participate. Some of the documentation required under the scheme, such as board minutes of the vehicle company, was pre-drafted. The scheme was then implemented as planned.
Held: The Revenue’s appeals were allowed. The tax system is to work real world transactions, and those transactions manufactured for no reason other than for tax avoidance should not encouraged. The exemption allowed under section 423 is to be construed to apply only to transactions having a real world purpose: ‘ the reference in section 423(1) to ‘any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) applies’ is to be construed as being limited to provision having a business or commercial purpose, and not to commercially irrelevant conditions whose only purpose is the obtaining of the exemption.’
Lord Reed reiterated that whatever the context (in casu tax) the ultimate question was always one of statutory construction: ‘Unfortunately’, the Committee commented in Barclays Mercantile at para 34, ‘the novelty for tax lawyers of this exposure to ordinary principles of statutory construction produced a tendency to regard Ramsay as establishing a new jurisprudence governed by special rules of its own’. In the Barclays Mercantile case the Committee sought to achieve ‘some clarity about basic principles’. It summarised the position . . ‘The essence of the new approach was to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall effect of a number of elements intended to operate together) answered to the statutory description . . As Lord Nicholls of Birkenhead said in MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311, 320, para 8: ‘The paramount question always is one of interpretation of the particular statutory provision and its application to the facts of the case”.

Judges:

Lord Neuberger, President, Lord Mance, Lord Reed, Lord Carnwath, Lord Hodge

Citations:

[2016] UKSC 13, [2016] STI 513, [2016] 1 WLR 1005, [2016] STC 934, [2016] 3 All ER 1, [2016] BTC 11, [2016] WLR(D) 133, UKSC 2014/0151

Links:

Bailii, Bailii Summary, WLRD, SC, SC Summary

Statutes:

Income Tax (Earnings and Pensions) Act 2003 423

Jurisdiction:

England and Wales

Citing:

Cited – W T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .
Cited – Barclays Mercantile Business Finance Ltd v Mawson (HM Inspector of Taxes) HL 25-Nov-2004
The company had paid substantial sums out in establishing a gas pipeline, and claimed those sums against its tax as capital allowances. The transaction involved a sale and leaseback arrangement which the special commissioners had found to be a . .
At CA – DB Group Services (UK) Ltd v Revenue and Customs CA 16-Apr-2014
The two companies had established schemes designed to minimise tax on payments to employees, using a purpose made company to take advantage of exemptions under section 423. In oe cse the Revenue appealed against rejection of its challenge,nd in the . .
Cited – Weight (HM Inspector of Taxes) v Salmon HL 4-Mar-1935
TC Income Tax, Schedule E-Emolument of office – Salaried director – Right to take up shares at par value, their market value being considerably higher.
Where an employee receives shares as part of his . .
Cited – Abbott v Philbin (Inspector of Taxes) HL 21-Jun-1960
A company’s senior employees had been given an option to subscribe for its shares at the then current market price, the option being exercisable at any time within the next ten years. The employees were thus incentivised to increase the company’s . .
Cited – Snook v London and West Riding Investments Ltd CA 1967
Sham requires common intent to create other result
The court considered a claim by a hire-purchase company for the return of a vehicle. The bailee said the agreement was a sham.
Held: The word ‘sham’ should only be used to describe an act or document where the parties have a common intention . .
Cited – Inland Revenue Commissioners v Scottish Provident Institution HL 25-Nov-2004
The parties anticipated a change in the system for taxing gains on options to buy or sell bonds and government securities. An option would be purchased before the change and exercised after the change to create losses which could be set off against . .
Cited – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
At FTTTx – UBS Ag v Revenue and Customs FTTTx 15-Sep-2010
FTTTx Regulation 80, PAYE Regulations – Section 8, Social Security Contributions (Transfer of Functions, etc) Act 1999 – whether sums paid into a share scheme were earnings of the staff for whom they were paid – . .
At FTTTx – Deutsche Bank Group Services (UK) Ltd v Revenue and Customs FTTTx 19-Jan-2011
Regulation 80, PAYE Regulations – Section 8, Social Security Contributions (Transfer of Functions, etc) Act 1999 – whether sums paid into a share scheme were earnings of the staff for whom they were paid – whether the shares purchased as part of the . .
At UT – UBS AG v HM Revenue and Customs UTTC 17-Sep-2012
UTTC Income Tax and NICs: scheme to deliver bonuses in form of shares avoiding income tax and NIC. S18(1) ITEPA Rule 2 – whether employee became ‘entitled to payment’ when amount of bonus determined. Ch 2 Part 7 . .
Cited – Inland Revenue Commissioners v Burmah Oil Co Ltd HL 3-Dec-1981
HL Corporation tax – Chargeable gains – Allowable losses – Tax avoidance scheme involving disposal of shares by parent company following rights issue by subsidiary company – Consideration for rights issue – . .
Cited – Furniss (Inspector of Taxes) v Dawson HL 9-Feb-1983
The transfer of shares to a subsidiary as part of a planned scheme immediately to transfer them to an outside purchaser was regarded as a taxable disposition to the outside purchaser rather than an exempt transfer to a group company. In defined . .
Cited – Commissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
Cited – Collector of Stamp Revenue v Arrowtown Assets Ltd 4-Dec-2003
(Hong Kong Final Court of Appeal) The court was asked as to the accounting treatment of interests incurred in the development for the purpose of generating the profits, and therefore whether the relevant Ordinance prohibited the capitalisation of . .
Cited – Carreras Group Limited v The Stamp Commissioner PC 1-Apr-2004
PC (Jamaica) The transfer of shares in exchange for a debenture with a view to its redemption a fortnight later was not regarded as an exempt transfer in exchange for the debenture but rather as an exchange for . .
Cited – Revenue and Customs v Tower MCashback Llp 1 and Another SC 11-May-2011
No re-opening after closure notices
The taxpayer had purchased software licences (SLA), and set out to claim the full cost against its tax liabiilities under the 2001 Act in the first year. The taxpayer said that after the Revenue had issued closure notices, it was not able to re-open . .
Cited – MacNiven (Inspector of Taxes) v Westmoreland Investments Ltd HL 15-Feb-2001
The fact that a payment of interest was made only to create a tax advantage did not prevent its being properly claimed. Interest was paid for the purposes of setting it against tax, when the debt was discharged. A company with substantial losses had . .

Cited by:

Cited – National Aids Trust v National Health Service Commissioning Board (NHS England) Admn 2-Aug-2016
NHS to make drug available
The claimant charity said that drugs (PrEP) prophylactic for AIDS / HIV should be made available by the defendant and through the NHS. The respndent said that the responsibility for preventative medicine for sexual health lay with local authorities. . .
Cited – Uber Bv and Others v Aslam and Others SC 19-Feb-2021
Smartphone App Contractors did so as Workers
The court was asked whether the employment tribunal was entitled to find that drivers whose work was arranged through Uber’s smartphone application work for Uber under workers’ contracts and so qualify for the national minimum wage, paid annual . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Banking

Updated: 08 August 2022; Ref: scu.560718

HM Revenue and Customs v Banerjee (1): ChD 19 Jun 2009

The taxpayer sought anonymity in the reporting of the case against her.
Held: No, she could not be given anonymity.
Henderson J said: ‘In determining whether it is necessary to hold a hearing in private, or to grant anonymity to a party, the court will consider whether, and if so to what extent, such an order is necessary to protect the privacy of confidential information relating to the party, or (in terms of Article 8 of the Convention) the extent to which the party’s right to respect for his or her private life would be interfered with. The relevant test to be applied in deciding whether a person’s Article 8(1) rights would be interfered with in the first place, or in other words whether the Article is engaged so as to require justification under Article 8(2), is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy: see Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457, at paragraph 21 per Lord Nicholls of Birkenhead, and Murray v Express Newspapers Plc [2008] EWCA Civ 446, [2008] 3 WLR 1360, at paragraph 24 of the judgment of the court. If Article 8(1) is engaged, the court will then need to conduct a balancing exercise on the facts, weighing the extent of the interference with the individual’s privacy on the one hand against the general interest at issue on the other hand. In cases involving the media, the competing general interest will normally be the right of freedom of expression under Article 10 of the Convention. In cases of the present type, the competing interest is the general imperative for justice to be done in public, as confirmed by Article 6(1) of the Convention.’

Judges:

Henderson J

Citations:

[2009] EWHC 1229 (Ch), [2009] EMLR 24, [2009] BTC 337, [2009] STC 1930, [2009] STI 1963, [2009] 3 All ER 930

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – HM Revenue and Customs v Banerjee (No 2) ChD 19-Jun-2009
The court was asked whether the taxpayer dermatologist could deduct the expenses of attending educational courses, conferences and meetings, including associated costs of travel and accommodation.
Held: She could.
The defendant requested . .

Cited by:

Cited – Imerman v Tchenguiz and Others QBD 27-Jul-2009
It was said that the defendant had taken private and confidential material from the claimant’s computer. The claimant sought summary judgement for the return of materials and destruction of copies. The defendant denied that summary judgement was . .
See Also – HM Revenue and Customs v Banerjee CA 28-Jul-2010
The taxpayer doctor had claimed against her income tax, the costs of attending training courses required under her employment contract and for professional development. The Revenue appealed against a decision allowing the expenses.
Held: The . .
Cited – ZC v Royal Free London NHS Foundation Trust QBD 26-Jul-2019
Defamation/privacy claims against doctors failed
The claimant, seeking damages for alleged defamation, now asked for the case to be anonymised.
Held: The conditions for anonymisation were not met. The anonymity would be retained temporarily until any time for appeal had passed.
As to . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Media

Updated: 07 August 2022; Ref: scu.347121

Walters (Inspector of Taxes) v Tickner: QBD 13 Jul 1993

A taxpayer may challenge an assessment if it was raised more than 12 months after the relevant year.

Citations:

Times 13-Jul-1993

Statutes:

Income and Corporation Taxes Act 1970 206

Jurisdiction:

England and Wales

Citing:

See Also – Walters (Inspector of Taxes) v Tickner ChD 6-May-1992
A taxpayer is entitled to have his liability decided by the law and not by Inland Revenue Practice. . .

Cited by:

Appeal from – Walters v Tickner (Inspector of Taxes) CA 9-Aug-1993
An appeal out of time from an assessment was allowed where there was an unqualified exemption. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90270

Walters (Inspector of Taxes) v Tickner: CA 26 Jan 1994

An obscure provision was not sufficient to displace practice and a right of exemption.

Citations:

Gazette 26-Jan-1994

Jurisdiction:

England and Wales

Citing:

See Also – Walters v Tickner (Inspector of Taxes) CA 9-Aug-1993
An appeal out of time from an assessment was allowed where there was an unqualified exemption. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90271

Walters (Inspector of Taxes) v Tickner: ChD 6 May 1992

A taxpayer is entitled to have his liability decided by the law and not by Inland Revenue Practice.

Citations:

Gazette 06-May-1992

Jurisdiction:

England and Wales

Cited by:

See Also – Walters (Inspector of Taxes) v Tickner QBD 13-Jul-1993
A taxpayer may challenge an assessment if it was raised more than 12 months after the relevant year. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90272

Walters v Tickner (Inspector of Taxes): CA 9 Aug 1993

An appeal out of time from an assessment was allowed where there was an unqualified exemption.

Citations:

Ind Summary 09-Aug-1993

Jurisdiction:

England and Wales

Citing:

Appeal from – Walters (Inspector of Taxes) v Tickner QBD 13-Jul-1993
A taxpayer may challenge an assessment if it was raised more than 12 months after the relevant year. . .

Cited by:

See Also – Walters (Inspector of Taxes) v Tickner CA 26-Jan-1994
An obscure provision was not sufficient to displace practice and a right of exemption. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90273

Wannell v Rothwell (Inspector of Taxes): ChD 29 Mar 1996

Losses which had been incurred in speculative non-commercial trading in shares and commodities were not ‘trade’ losses for income tax purposes, even though the tax payer intended to become involved in fund management as a career, and had intended these activities to be a commercially successful series. The taxpayer had claimed up to sixteen calls a day to his broker, but had made only 20 or so trades year. He had in one year declared on his tax return that he had had no profit or loss in trading in that year. The commissioner’s finding that there had been ‘no commercial organisation’ to his activities was not fully understood, but was not so wrong in law or fact as to be capable of being set aside.

Judges:

Robert Walker J

Citations:

Times 11-Apr-1996

Statutes:

Income and Corporation Taxes Act 1988 380, Income and Corporation Taxes Act 1970 168(1), Finance Act 1978 30(4)

Jurisdiction:

England and Wales

Income Tax

Updated: 06 August 2022; Ref: scu.90291

Venables and Others v Hornby (Inspector of Taxes): ChD 14 Jun 2001

The word ‘retirement’ connotes a withdrawal from work, rather than merely a reduction in workload. A director claimed to have retired, and to be entitled to draw his pension, and to receive pension tax relief.
Held: Whether he had retired was a question of fact and degree for each case. In this case it was found that the taxpayer had in fact retired, and his health condition was such as to justify his suggestion that his early retirement was due to his physical condition, and that words in the early retirement clause were inserted in error or were surplusage.

Judges:

Collins J

Citations:

Times 11-Jul-2001, Gazette 09-Aug-2001, [2001] EWHC Ch 408

Links:

Bailii

Statutes:

Finance Act 1970

Jurisdiction:

England and Wales

Cited by:

Appeal from – David J Venables and Others v Hornby (Inspector of Taxes) CA 18-Sep-2002
The appellant was an employee and director of the company. He ceased employment, and sought to receive payments from his pensions, but continued to hold the position of director.
Held: The provisions of the pension scheme had to be read in the . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 06 August 2022; Ref: scu.90146

Inland Revenue Commissioners v British Salmson Aero Engines Ltd: CA 1938

The court considered the applicability of certain provisions to royalty payments. The court considered the notorious difficulty of drawing a clear line between capital and income receipts: ‘There have been many cases which fall on the border-line. Indeed, in many cases it is almost true that the spin of a coin would decide the matter almost as satisfactorily as an attempt to find reasons. But that class of questions is a notorious one, and has been so for many years.’

Judges:

Sir Wilfrid Greene MR

Citations:

[1938] 2 KB 482

Jurisdiction:

England and Wales

Cited by:

Cited – Atkinson (HM Inspector of Taxes) v Camas Plc CA 6-May-2004
An investment company made an abortive attempt to take over another. It sought to set off against its Corporation Tax, the costs of the professional advice incurred.
Held: The expenses were deductible. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 05 August 2022; Ref: scu.198423

Hall (Inspector of Taxes) v Lorimer: ChD 8 Jul 1992

A skilled vision mixer who was working for several companies was self employed.
Mummery J said: ‘In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.’

Judges:

Mummery J

Citations:

Gazette 08-Jul-1992

Jurisdiction:

England and Wales

Citing:

Appealed to – Hall (Inspector of Taxes) v Lorimer CA 5-Nov-1993
A freelance vision mixer remained self-employed despite having had a series of short term contracts. . .

Cited by:

Appeal from – Hall (Inspector of Taxes) v Lorimer CA 5-Nov-1993
A freelance vision mixer remained self-employed despite having had a series of short term contracts. . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 05 August 2022; Ref: scu.81162

Commissioners of Inland Revenue v Payne: CA 1940

The taxpayer covenanted to pay an annual sum to a company controlled by him for his life or until it was wound up. He claimed to deduct the amount of the covenant in the computation of his total income for surtax purposes. The Revenue refused his claim saying the arrangement was a revocable settlement and the income arising remained his.
Held: The Revenue was correct. There was a settlement: ‘The covenant had, apparently, no business purpose whatsoever. It was linked up with the rest of the scheme, the essential parts of which were that [the taxpayer] should put himself in such a relationship to the company that he could entirely control it by means of his voting power.’
and ‘It appears to me that the whole of what was done must be looked at; and when that is done, the true view, in my judgment, is that Mr. Walter Payne deliberately placed himself into a certain relationship to the company as part of one definite scheme, the essential heads of which could have been put down in numbered paragraphs on half a sheet of notepaper. Those were the things which it was essential that Mr. Payne should do if he wished to bring about the result desired. He did it by a combination of obtaining the control of the company, entering into the covenant, and then dealing with the company in such a way as to achieve his object. Now, if a deliberate scheme, perfectly clear cut, of that description is not an ‘arrangement’ within the meaning of the definition clause, I have difficulty myself in seeing what useful purpose was achieved by the Legislature in putting that word into the definition at all. I am clearly of opinion that, by placing himself into these relationships with the company, Mr. Walter Payne was engaged in making an ‘arrangement’ within the meaning of that clause.’

Judges:

Sir Wilfrid Greene MR

Citations:

(1940) 23 TC 610, [1940] EWCA 23 – 0610

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Jones v Michael Vincent Garnett (HM Inspector of Taxes) CA 15-Dec-2005
Husband and wife had been shareholders in a company, the wife being recorded as company secretary. The company paid dividenceds to both. The husband appealed a decision that the payment to his wife was by way of a settlement and was taxable in his . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 05 August 2022; Ref: scu.236561

Hill Samuel Investments Ltd v Revenue and Customs: SCIT 20 Feb 2009

SCIT DOUBLE TAXATION RELIEF – effect of s 795A Taxes Act 1988 – whether the reasonable steps include entering into a different transaction – no – appeal allowed

Citations:

[2009] UKSPC SPC00738, [2009] STI 695, 11 ITL Rep 734, [2009] STC (SCD) 315

Links:

Bailii

Statutes:

Income and Corporation Taxes Act 1988 795A

Income Tax

Updated: 03 August 2022; Ref: scu.373751

A v Revenue and Customs: SCIT 4 Feb 2009

SCIT INCOME TAX: Compensation payable under agreement to settle a dispute of unfair dismissal before Employment Tribunal – Dispute concerned the proportion of compensation that could be regarded as employment income – Appellant argued that the majority of the compensation was for damage to reputation unconnected with the termination of his employment – satisfied that the compensation was received directly in connection with the termination except andpound;10,000 for injury to feelings – Appeal dismissed – s 401(1) ITEPA 2003

Citations:

[2009] UKSPC SPC00734

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373749

Burns and Another v Revenue and Customs: SCIT 13 Jan 2009

SCIT Income Tax – Sections 739 and 741 Taxes Act 1988 – Transfers of UK properties to two Jersey companies – Whether effected without the purpose of avoiding UK taxation – Whether either of the ‘non tax avoidance’ protections of section 741 was available to preclude liability under section 739 – Appeal dismissed

Citations:

[2009] UKSPC SPC00728, [2009] STC (SCD) 165, [2009] STI 262

Links:

Bailii

Income Tax

Updated: 03 August 2022; Ref: scu.373743

Clarke v Revenue and Customs: SCIT 8 Jan 2009

SCIT Income Tax – Enquiry under section 9A TMA 1970, requirement to produce and furnish documents under section 19A TMA 1970 – Taxpayer alleging enquiry opened and requirement made for vindictive reasons – Taxpayer arguing that section 19A did not confer authority to require documents to be created –
Held: (1) the Tribunal was required to consider the actual purposes of the officer in giving notice under section 19A; (2) on the evidence the officer’s purposes were the statutory purposes and were not vindictive; (3) section 19A did empower the officer to require the creation of documents; (4) subject to a minor variation the section 19A requirement was upheld

Citations:

[2009] UKSPC SPC00735, [2009] STI 592, [2009] STC (SCD) 278

Links:

Bailii

Statutes:

Taxes Management Act 1970 9A

Income Tax, Taxes Management

Updated: 03 August 2022; Ref: scu.373744

Stockler v Revenue and Customs: SCIT 20 Feb 2009

SCIT Income tax – penalties – whether penalty could be imposed on individual partner following tax litigation settlement agreement preventing amendment of partnership’s tax returns – yes – further issues arising to be determined later

Citations:

[2009] UKSPC SPC00739, [2009] STI 697, [2009] STC (SCD) 333

Links:

Bailii

Income Tax

Updated: 03 August 2022; Ref: scu.373753

Rockliff v Revenue and Customs: FTTTx 25 Jun 2009

FTTTx Income tax – pension payable to husband – claim that half of pension should be assessed on wife – Income and Corporation Taxes Act 1988 sections 1 and 19, Schedule E paragraph 2 – Income Tax (Earnings and Pensions) Act 2003 sections 569, 571 and 572 – Matrimonial Causes Act 1973 sections 21A and 24B – Human Rights Act 1998 sections 3, 4 and 6 – European Convention on Human Rights Article 14and Protocol 1 Article 1 – Police Pensions Regulations 1987 – appeals dismissed

Citations:

[2009] UKFTT 162 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373692

Spowage and Others v Revenue and Customs: FTTTx 18 Jun 2009

FTTTx Seafarers’ earnings; ship; offshore installation; whether vessels offshore installations; Mineral Workings (Offshore Installations) Act 1971 sections 1 and 12; Income and Corporation Taxes Act 1988 section 192A, 837C; Income Tax (Earnings and Pensions) Act 2003 sections 378-385; Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995, regulation 3(1)(a)(c)and(d) and (2)(d)and(e)

Citations:

[2009] UKFTT 142 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373694

Cornell v Revenue and Customs: FTTTx 11 Jun 2009

FTTTxxx Income tax – taxation of earnings – emoluments – whether payment a payment in lieu of notice – whether breach of contract – no – applicable notice period under contract of employment – three months – appeal dismissed

Citations:

[2009] UKFTT 140 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373674

PA Holdings Ltd and Another v Revenue and Customs: FTTTx 7 May 2009

FTTTx Income tax – other – whether sums paid to individuals by a company as a dividend financed from a capital contribution to the company from employee benefits funds derived from the individuals’ employing company a distribution chargeable under Schedule F or emoluments from employment under Schedule E and subject to the PAYE Regulations – rules requiring exclusivity of Schedules applied National Insurance contributions – liability – whether a decision that income taxable under Schedule F of the income tax as a distribution prevented the income also being subject to National Insurance contributions as earnings from employment.

Citations:

[2009] UKFTT 95 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

At SCIT – PA Holdings Ltd v Revenue and Customs SCIT 29-Aug-2008
SCIT The Revenue issued separate decisions that certain sums paid to employees of Holdings in the three years to April 2003 were emoluments liable to income tax under PAYE and earnings on which Holdings is liable . .

Cited by:

Appeal from – P A Holdings UTTC 7-Jul-2010
UTTC Income Tax – Tax avoidance scheme – Dividend from new company instead of bonus: whether Ramsay jurispudence applies – Schedule E and meaning of emoluments from employment – Schedule F and meaning of dividend . .
At FTTTx – HM Revenue and Customs v PA Holdings Ltd CA 30-Nov-2011
The company made available to certain employees discretionary annual bonuses which were paid instead by way of shares and received dividends. It now appealed against findings that the payments were taxable subject to Schedule F rates and were liable . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 03 August 2022; Ref: scu.373659

Self v Revenue and Customs: FTTTx 29 Apr 2009

FTTTx INCOME TAX – payments made by firm to partners who were asked to withdraw from the partnership – whether payments chargeable to income tax as profits – yes – or whether payments were expenditure which should have been deducted by the firm in computing its profits – no – appeal dismissed – ICTA 1988 ss 18 and 74

Citations:

[2009] UKFTT 78 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 03 August 2022; Ref: scu.373629

Wright v Revenue and Customs: FTTTx 20 Apr 2009

FTTTx Income tax and National Insurance Contributions – whether workers were employed by the Appellant – Initial appeal allowed by the General Commissioners and held by the High Court to have been based on a wrong application of the law – case remitted to the General Commissioners for them to ascertain further facts relevant to ‘control’ – Case subsequently transferred to the Special Commissioners – Appeal dismissed

Citations:

[2009] UKFTT 53 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Taxes – Other, Income Tax

Updated: 03 August 2022; Ref: scu.373632

Wicks v Firth (Inspector of Taxes); Johnson v Firth: CA 1981

ICI set up a trust fund to make discretionary payments to its employees to assist meeting the costs of further education. Payments made to children were treated as scholarship income and exempt under the 1970 Act. The revenue claimed it to be an employment benefit.
Held: The benefit was paid to the taxpayer’s son ‘by reason of [the taxpayer’s] employmnt within s61’. The exemption given under s375 did not exclude the charge to tax under s61.

Citations:

[1982] 2 WLR 208, [1982] 2 All R 9

Statutes:

Income and Corporation Taxes Act 1970 375, Finance Act 1976 61

Jurisdiction:

England and Wales

Administrative, Income Tax

Updated: 31 July 2022; Ref: scu.193467

Harbron v Revenue and Customs: FTTTx 24 Mar 2010

Income tax – direct sales manager – undisclosed profits – appeals against assessments, closure notices and penalties – enquiries by HMRC revealed Appellant’s self assessments were understated – whether assessments, decisions and penalties were justified – yes with minor amendments – appeals dismissed – sections 36, 28A, 95 and 74 TMA 1970

Citations:

[2010] UKFTT 127 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 30 July 2022; Ref: scu.408962

Coales v Revenue and Customs: FTTTx 26 Jul 2012

INCOME TAX – surcharge under section 59C(2) Taxes Management Act 1970 – whether reasonable excuse – test for reasonable excuse: objective or subjective – authorities considered – appeal dismissed

Citations:

[2012] UKFTT 477 (TC), [2012] STI 3069, [2012] SFTD 1371

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 28 July 2022; Ref: scu.466027

X C-155/08: ECJ 11 Jun 2009

ECJ Freedom to provide services – Free movement of capital – Wealth tax – Income tax – Savings deposited in a Member State other than the Member State of residence No declaration Recovery period Extension of the recovery period in the case of assets held outside the Member State of residence Directive 77/799/EEC – Mutual assistance of the competent authorities of the Member States in the field of direct and indirect taxation Banking secrecy.

Citations:

[2009] EUECJ C-155/08

Links:

Bailii

Statutes:

Directive 77/799/EEC

Jurisdiction:

European

Income Tax

Updated: 28 July 2022; Ref: scu.347054

X C-157/08: ECJ 11 Jun 2009

ECJ Freedom to provide services – Free movement of capital – Wealth tax – Income tax – Savings deposited in a Member State other than the Member State of residence No declaration Recovery period Extension of the recovery period in the case of assets held outside the Member State of residence Directive 77/799/EEC – Mutual assistance of the competent authorities of the Member States in the field of direct and indirect taxation Banking secrecy.

Citations:

C-157/08, [2009] EUECJ C-157/08

Links:

Bailii

Jurisdiction:

European

Income Tax

Updated: 28 July 2022; Ref: scu.347055

TMF Trustees Singapore Ltd v HM Revenue and Customs: CA 2 Mar 2012

The court was asked whether pension scheme set up in Singapore is or is not a qualifying recognised overseas pension scheme

Citations:

[2012] EWCA Civ 192

Links:

Bailii

Statutes:

Finance Act 2004, Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006

Jurisdiction:

England and Wales

Income Tax

Updated: 26 July 2022; Ref: scu.451803

Bamber, Regina (on the Application Of) v Revenue and Customs: Admn 21 Dec 2005

Judges:

Lindsay J

Citations:

[2005] EWHC 3221 (Admin), [2006] STC 1035

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Bamber, Regina (on the Application of) v HM Revenue and Customs Admn 4-Apr-2007
The claimant sought to challenge the respondent’s decision as to the increase in flat rate allowances allowed to pilots and air crew at MyTravel. . .
Cited – Oxfam v Revenue and Customs ChD 27-Nov-2009
The charity appealed against refusal to allow it to reclaim input VAT. It also sought judicial review of the decision of the Tribunal not to allow it to raise an argument of legitimate expectation. The charity had various subsidiaries conducting . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Administrative

Updated: 26 July 2022; Ref: scu.238415

Regina v Inland Revenue Commissioners, Ex parte Woolwich Equitable Building Society: HL 25 Oct 1990

The society challenged the validity of transitional provisions in the 1986 regulations on the ground that they were ultra vires. The House considered the specific presumption against double taxation, and also a power in general terms to make regulations for the taxation of building society interest. The Society complained that the effect of the regulations was to make it subject to tax in respect of payments of interest which had already been taxed in a previous year and that the statute should not be construed as permitting such double taxation.
Held: The background to the enactment of the statute made it clear that this was exactly what Parliament had in mind. The suggested inhibition against cumulative taxation lies not in the words which Parliament has chosen to use but in certain well-established presumptions or principles – a presumption against double taxation, a presumption that income tax, being an annual tax, is payable only on income of a particular year and so on. But these are only presumptions. They are clearly rebuttable if sufficiently clear express words are used. But they can also be rebutted, as it seems to me, by circumstances surrounding the enactment of the particular legislation which lead to an inevitable inference that Parliament intended, in using the words that it did, that these presumptions or principles should not apply. A party who had made a payment to the Revenue pursuant to an unlawful demand was entitled as of right to a restitutionary remedy, regardless of whether in making the payment the payer was acting under any mistake of law.

Judges:

Lord Oliver of Aylmerton, Lord Goff, Lord Browne-Wilkinson

Citations:

[1990] 1 WLR 1400, [1990] UKHL TC – 63 – 589

Links:

Bailii

Statutes:

Income Tax (Building Societies) Regulations 1986

Jurisdiction:

England and Wales

Citing:

See Also – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .

Cited by:

Cited – Regina v Central Valuation Officer and another ex parte Edison First Power Limited HL 10-Apr-2003
Powergen sold a property to Edison. Powergen had paid rates under a separate statutory rating regime, and paid an additional thirteen million pounds under an apportionment. Edison later complained that in being rated itself, the authorities had . .
See Also – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Smithkline Beecham Plc Glaxosmithkline UK Ltd and Another v Apotex Europe Ltd and others (No 2) CA 23-May-2006
The parties to the action had given cross undertakings to support the grant of an interim injunction. A third party subsequently applied to be joined, and now sought to take advantage of the cross undertakings to claim the losses incurred through . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 26 July 2022; Ref: scu.182560

Gray (Inspector of Taxes) v Seymours Garden Centre: Chd 10 May 1993

A glasshouse ‘planteria’ which was used to show plants in a garden centre, was premises and not plant for capital allowances purposes.

Citations:

Ind Summary 18-Oct-1993, Ind Summary 10-May-1993

Statutes:

Capital Allowances Act 1990 22

Jurisdiction:

England and Wales

Citing:

Appealed to – Gray (Inspector of Taxes) v Seymours Garden Centre (Horticulture) CA 31-May-1995
A ‘Planteria’ for the growing and storage of plants pending sale was premises, or a building, and not plant; no allowance was available. In considering the appeal, ‘the question for this Court, as it was for the Judge, is whether the facts found by . .

Cited by:

Appeal from – Gray (Inspector of Taxes) v Seymours Garden Centre (Horticulture) CA 31-May-1995
A ‘Planteria’ for the growing and storage of plants pending sale was premises, or a building, and not plant; no allowance was available. In considering the appeal, ‘the question for this Court, as it was for the Judge, is whether the facts found by . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 25 July 2022; Ref: scu.80985

Radio Pictures v Commissioners of Inland Revenue: ChD 1938

The court considered whether a particular document could properly be included among the batch of documents which as a whole formed the contract, so that the stipulations therein were themselves contractual.

Judges:

Lawrence J

Citations:

[1938] 22 TC 106

Jurisdiction:

England and Wales

Cited by:

Disapproved – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Contract

Updated: 25 July 2022; Ref: scu.251070

Uwe Ruffler v Dyrektor Izby Skarbowej we Wroclawiu Osrodek Zamiejscowy w Walbrzychu (Free Movement Of Persons): ECJ 23 Apr 2009

ECJ Article 18 EC – Income tax legislation – Reduction of income tax by the amount of health insurance contributions paid in the Member State of taxation – Refusal of reduction by the amount of contributions paid in other Member States.

Citations:

C-544/07, [2009] EUECJ C-544/07

Links:

Bailii

European, Income Tax

Updated: 24 July 2022; Ref: scu.342047

Tom Hudson (HM Inspector of Taxes) v JDC Services Limited: ChD 26 Mar 2004

The taxpayer company had been refused a statutory Construction Industry Scheme certificate. The General Commissioners allowed the company’s appeal and itself issued a certificate. The revenue said the Commissioners had no jurisdiction either to hear an appeal or to issue such a certificate.
Held: The scheme created by the 1971 Act was a special one. A certificate could only be granted where the contractor met the conditions set down in the 1998 Act. The company’s breaches in this case had not been merely technical, and therefore the Commissioners’ decision had been wrong. The court had jurisdiction under the 1070 Act to issue the necessary orders.

Judges:

The Hon Mr Justice Lightman

Citations:

Times 16-Apr-2004, [2004] EWHC 602 (Ch)

Statutes:

Income and Corporation Taxes Act 1988 561(9), Finance Act 1971 29 30, Taxes Management Act 1970 56(6)

Jurisdiction:

England and Wales

Citing:

Cited – Lothbury Investment Corporation Ltd v Inland Revenue Commissioners 1979
The taxpayer company was a non-trading company owing shareholders substantial sums. Rather than pay dividends it waived dividends it held in a public company, and the shareholder waived interest on the loans. The IR apportioned the income of the . .
Cited – Regina on the Application of Dart Harbour and Navigation Authority v the Secretary of State for Transport Local Government and the Regions QBD 26-Jun-2003
Captain Wyatt owned land near the harbour and wanted to moor his boat by it. The Harbour authority said he needed a licence. The Harbour authority requested him to move the boat as a danger to navigation. The Captain sought a judicial review of the . .
Cited – Colpitt v Australian Communications 1986
The word ‘review’ means a rehearing which may pronounce anew the rights of the parties. . .
Cited – Shaw (Inspector of Taxes) v Vicky Construction Ltd ChD 6-Dec-2002
The General Commissioner had held that an inspector’s refusal to renew a certificate allowing the taxpayer construction company to pay its sub-contractors without deducting income tax, infringed that company’s rights. The inspector appealed.
Lists of cited by and citing cases may be incomplete.

Income Tax, Construction, Taxes Management

Updated: 24 July 2022; Ref: scu.194993

Grays Timber Products Ltd v HM Revenue and Customs: SCS 13 Feb 2009

The company appealed against a determination by the defendants that when an employee had sold his shares, it had done so at a price over the market value, and in doing so, incurred a charge to income tax.
Held: The appeal failed.

Citations:

[2009] ScotCS CSIH – 11, [2009] STC 889

Links:

Bailii

Statutes:

Income Tax (Earnings and Pensions) Act 2003 446X(b)

Jurisdiction:

Scotland

Cited by:

At SCS – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 23 July 2022; Ref: scu.291793

Regina v Inland Revenue Commissioners Ex Parte Commerzbank: ECJ 21 Jul 1993

UK provision on company domicile/taxation is unfair to Overseas companies.
Europa Freedom of movement for persons – Freedom of establishment – Tax legislation – Right to repayment supplement when tax paid but not due is refunded – Refund only available to companies resident for tax purposes in national territory – Not permissible – Tax not due on the ground that residence for tax purposes is abroad – Irrelevant (EEC Treaty, Arts 52 and 58)
Articles 52 and 58 of the Treaty prevent the legislation of a Member State from granting repayment supplement on overpaid tax to companies which are resident for tax purposes in that State whilst refusing the supplement to companies resident for tax purposes in another Member State. The fact that the latter would not have been exempt from tax if they had been resident in that State is of no relevance in that regard. Although it applies independently of a company’ s seat and therefore of the factor connecting it with the legal system of a particular State, the use of the criterion of fiscal residence within national territory for the purpose of granting repayment supplement on overpaid tax is liable to work more particularly to the disadvantage of companies having their seat in other Member States since it is most often those companies which are resident for tax purposes outside the territory of the Member State in question.

Citations:

Times 21-Jul-1993, C-330/91, [1993] EUECJ C-330/91

Links:

Bailii

Jurisdiction:

European

Income Tax, European

Updated: 23 July 2022; Ref: scu.86933

Regina v Inland Revenue Commissioners, Ex Parte Matrix Securities Ltd: CA 10 Nov 1993

The withdrawal of a scheme approval after non-disclosure by the taxpayer was not an abuse of power by the Commissioners.

Citations:

Gazette 26-Jan-1994, Times 10-Nov-1993

Jurisdiction:

England and Wales

Citing:

Appeal from – Regina v Inland Revenue Commissioners Ex Parte Matrix Securities Ltd QBD 22-Oct-1993
A tax clearance was properly withdrawn because of non-disclosure. There was no abuse by the Revenue. . .

Cited by:

Appeal from – Regina v Inland Revenue Commissioners Ex Parte Matrix Securities Ltd HL 14-Mar-1994
The applicant had obtained what it thought to be clearance from the Revenue for a complex scheme, whose effectiveness depended on whether investors would qualify for capital allowances. The Inspector initially gave a favourable assurance, but that . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 23 July 2022; Ref: scu.86941

Ingenious Media Holdings Plc and Another, Regina (on The Application of) v Revenue and Customs: CA 4 Mar 2015

The claimant sought judicial review of the disclosure, off the record by an officer of the defendant to a journalist, of confidential materials as to their investigation of his involvement in a film investment scheme. The claim had been rejected by the Administrative Court.
Held: The appeal failed. Sir Robin rejected the claimants’ arguments that the disclosures made were not ‘in connection with a function’ of HMRC, properly construed, and that the judge had adopted the wrong standard of review. As to the first argument, he held that a wide meaning should be given to section 18(2)(a)(i) (‘ . . subsection (1) does not apply to a disclosure which is made for the purposes of a function of the Revenue and Customs’). As to the second argument, Sir Robin echoed Sales J’s holding that it was not for the court to ‘review all the facts de novo as though it were the primary decision maker’.

Judges:

Sir Robin Jacob, Moore-Bick and Tomlinson LJJ

Citations:

[2015] EWCA Civ 173, [2015] STI 612, [2015] STC 1357, [2015] 1 WLR 3183, [2015] BTC 12

Links:

Bailii

Statutes:

Commissioners for Revenue and Customs Act 2005 18

Jurisdiction:

England and Wales

Citing:

Appeal from – Ingenious Media Holdings Plc and Another, Regina (on The Application of) v HM Revenue and Customs Admn 25-Oct-2013
Application for judicial review of a decision of the Defendants acting by one of their most senior officials to disclose information relating to the claimants in an ‘off the record’ briefing with two journalists.
Held: The request for judicial . .

Cited by:

At CA – Ingenious Media Holdings Plc and Another, Regina (on The Application of) v Revenue and Customs SC 19-Oct-2016
The tax payer complained that the Permanent Secretary for Tax had, in an off the record briefing disclosed tax details regarding a film investment scheme. Despite the off the record basis, details were published in a newspaper. His claims had been . .
Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 23 July 2022; Ref: scu.543878

Thorpe v Revenue and Customs: ChD 26 Mar 2009

Appeals from notices of assessment to income tax – withdrawal of funds from pension scheme

Judges:

Sir Edward Evans-Lombe

Citations:

[2009] EWHC 611 (Ch), (2009-10) 12 ITELR 279, [2009] STI 824, [2009] WTLR 1269, [2009] BTC 177, [2009] Pens LR 139, [2009] STC 2107

Links:

Bailii

Jurisdiction:

England and Wales

Income Tax

Updated: 22 July 2022; Ref: scu.326090

Glasgow Heritable Trust v Inland Revenue: SCS 3 Feb 1954

Appeal by the subject from the Special Commissioners against assessments to income tax under Case I of Schedule D; and the question of law on which we have so far heard argument is ‘whether there was evidence on which we were entitled to find that the sales effected by the company were made in the course of a trade carried on by it.’ The rival contention presented by the appellants was that the company had merely realised fixed capital assets and was therefore immune from taxation on the ‘profits.’

Citations:

[1954] ScotCS CSIH – 3, (1954) 33 ATC 151, 47 R and IT 127, 1954 SLT 97, 1954 SC 266, 35 TC 196

Links:

Bailii

Jurisdiction:

Scotland

Income Tax

Updated: 22 July 2022; Ref: scu.279428