Category: Income Tax

Dina Foods Ltd v Revenue and Customs: FTTTx 5 Nov 2011

FTTTx Penalty – late payment of PAYE and NICs payments – FA 2009, Sch 56 – operation of the scheme of penalties – whether lack of specific warning a reasonable excuse – no – whether any special circumstances existed to justify a reduction in the penalty amount – no – whether appellant’s human rights infringed – no – appeal dismissed

[2011] UKFTT 709 (TC)
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.449649

Chi International Ltd v Revenue and Customs: FTTTx 11 Nov 2011

Penalty for late filing of P35 – obligation to file online – agent’s software license allowing limited number of returns – quota exceeded – licensor blocked submission of return – agent sent paper return to HMRC – penalty received – further paper copy submitted – whether reasonable excuse – no -appeal dismissed and penalty confirmed

[2011] UKFTT 730 (TC)
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.449646

De Beers Consolidated Mines Ltd v Howe, Surveyor of Taxes: HL 1905

The appellant Company was registered in the Cape Colony and it’s business was mining for diamonds in mines which it possessed in South Africa, and selling the diamonds there under annual contracts to a syndicate for delivery there. The Head Office was in South Africa, and general meetings were always held there. Some of the directors resided in South Africa and weekly meetings of the directors were held there. But the majority of the directors resided in England, and the meetings in London were the meetings at which the real control was exercised in all the important business of the company, except the actual mining operations. The sales of the Diamonds were controlled by the London board.
Held: The company was resident in the United Kingdom for the purposes of income tax. A foreign corporation may reside in this country for the purposes of income tax.
The question of where a company was resident was one of fact: ‘In applying the conception of residence to a company, we ought, I think, to proceed as nearly as we can upon the analogy of an individual. A company cannot eat or sleep, but it can keep house and do business. We ought, therefore, to see where it really keeps house and does business . . The decision of Kelly C.B. and Huddleston B. in the Calcutta Jute Mills v. Nicholson and the Cesena Sulphur Co. v. Nicholson, now thirty years ago, involved the principle [is] that a company resides for purposes of income tax where its real business is carried on . . I regard that as the true rule, and the real business is carried on where the central control and management actually abides.’
Whether any particular case falls within that rule is a ‘pure question of fact, to be determined not according to the construction of this or that regulation or bye-law, but upon scrutiny of the course of business and trading.’

Lord Loreburn LC
[1906] AC 455, (1905) 2 KB 612, 13 Mans 394, 22 TLR 34, 5 Tax Cas 198
England and Wales
Citing:
Adopted – Calcutta Jute Mills Co Ltd v Nicholson 1876
(Court of Exchequer) The residence of a company for tax purposes is decided by where the ‘central management and control’ is. . .

Cited by:
Cited – Wood v Holden (Inspector of Taxes) ChD 8-Apr-2005
The parties had entered into complex share transactions for the sale of their trading business, and sought to avoid liability for capital gains tax.
Held: Gains on disposals between members of a non-resident group of companies were exempt. The . .
Cited – Wood and Another v Holden (HMIT) CA 26-Jan-2006
Husband and wife sold their business, arranging matters so as to avoid paying Capital Gains Tax by transferring their interest between members of a group of companies which was non-resident.
Held: The scheme was effective. The sole real issue . .
Cited – Revenue and Customs v Smallwood and Another CA 8-Jul-2010
The taxpayers had set up trusts which they said were based in Mauritius allowing them to claim double taxation relief. The Revenue had issued closure notices, confirmed by the SPCT, but overturned by the High Court. The Revenue appealed, saying that . .
Cited – Tulip Trading Ltd v Bitcoin Association for BSV and Others ChD 5-Jan-2022
Security required for Bitcoin claim
Two applications for security for costs. The claimant claimed against fifteen overseas residents requiring a re-write of cryotocurrency systems so that he could recover sums he said were due to him in respect of Bitcoin assets which he said have . .

Lists of cited by and citing cases may be incomplete.

Taxes Management, Company, Income Tax

Updated: 17 January 2022; Ref: scu.224771

X-Wind Power Ltd v Revenue and Customs (Income Tax/Corporation Tax : Exemptions and Reliefs): FTTTx 10 May 2016

FTTTx SEED ENTERPRISE INVESTMENT SCHEME – application for authority to issue compliance certificate – form of application for enterprise investment scheme used by mistake – effect of ITA 2007 s 257DK – whether error capable of correction – no – appeal dismissed

[2016] UKFTT 317 TC
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.564843

Pensioneer Trustees (London) Ltd v Revenue and Customs (Income Tax/Corporation Tax : Pension Scheme): FTTTx 18 May 2016

FTTTx INCOME TAX – Purchase of properties by Pension Scheme – Whether ‘residential property’ – Yes – Whether ‘taxable property’ – Yes – Appeal dismissed – Schedule 29A Finance Act 2004

[2016] UKFTT 346 TC
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.564837

Mabe v Revenue and Customs (Income Tax/Corporation Tax : Sub-Contractors In The Construction Industry): FTTTx 12 May 2016

FTTTx Income Tax – Construction Industry Scheme – Direction under Regulation 9(5) refused – whether or not Condition A or Condition B in Regulation 9 is fulfilled – whether or not taxpayer took reasonable care – held yes – appeal allowed

[2016] UKFTT 340 TC
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.564835

Cherian v Revenue and Customs (Income Tax/Corporation Tax : Other): FTTTx 9 May 2016

FTTTx INCOME TAX – application for the tribunal to direct HMRC to issue a closure notice under s 28A Taxes Management Act 1970 – appeal against information notice issued under schedule 36 of the Finance Act 2008 and related penalties – application refused, information notice varied and appeal otherwise dismissed

[2016] UKFTT 316 TC
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.564823

Lomas and Others v HM Revenue and Customs: ChD 11 Oct 2016

Receivers’ payment of statutory interest gross

Substantial sums were to be repaid to creditors after the administration of Lehman Brothers produced a substantial surplus. The sums were to carry interest and the court now considered whether the sums due amounted to ‘yearly interest’ under section 874.
Held: The statutory interest to be paid under Rule 2.88(7) is not ‘yearly interest’ within the scope and meaning of section 874, and thus no obligation to deduct tax arises.

Hildyard J
[2016] EWHC 2492 (Ch), [2016] WLR(D) 518, [2016] STI 2782, [2017] Bus LR 520, [2016] BTC 42
Bailii, WLRD
Income Tax Act 2007 874
England and Wales
Cited by:
Appeal from – Revenue and Customs v Lomas and Others (Administrators of Lehman Brothers International (Europe)) CA 19-Dec-2017
. .
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.570125

Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe): SC 13 Mar 2019

The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest to creditors. Lehmann Brothers had become insolvent, but in the administration a substantial surplus was achieved. About 5 billion pounds was payable as statutory interest.
Held: The administrators’ appeal failed. Tax was deductible before payment out. Interest is paid as statutory compensation for the loss which the creditors have suffered by being kept out of their money during the administration. Income tax legislation adopted a dichotomy between the treatment of interest of any kind which is not paid out of profits or gains, on the one hand, and yearly interest, on the other hand.

Lord Reed (Deputy President), Lord Carnwath, Lord Hodge, Lady Black, Lord Briggs
[2019] UKSC 12, UKSC 2018/0013, [2019] Bus LR 927, [2019] 1 BCLC 609, [2019] STC 661, [2019] BTC 9, [2019] BCC 720, [2019] 2 All ER 559, [2019] STI 705, [2019] 1 WLR 2173
Bailii, Bailii Summary, SC, SC Summary, SC Summary Video, SC 2019 Feb 12 am Video, SC 2019 Feb 12 pm Video
Income Tax Act 2007 874, Insolvency Rules 2016 14.23(7)
England and Wales
Citing:
Cited – Bebb v Bunny 22-Dec-1854
A purchaser liable to pay interest on his purchase-money may deduct income tax from such interest. It was the practice to deduct the tax from the interest on debts upon promissory notes and the like in the offices of the Masters in Chancery. The tax . .
Appeal from – Revenue and Customs v Lomas and Others (Administrators of Lehman Brothers International (Europe)) CA 19-Dec-2017
. .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .
Cited – Vyse v Foster HL 1874
Where a person already has contractual relations with another, his assumption of a fiduciary role in relation to that other will not necessarily require him to abandon his own contractual interests. . .
Cited – Lomas and Others v HM Revenue and Customs ChD 11-Oct-2016
Receivers’ payment of statutory interest gross
Substantial sums were to be repaid to creditors after the administration of Lehman Brothers produced a substantial surplus. The sums were to carry interest and the court now considered whether the sums due amounted to ‘yearly interest’ under section . .
Cited – Sadler v the South Staffordshire and Birmingham District Steam Tramways Co CA 26-Jun-1889
Interest upon a loan by a banker to a customer for a period of less than a year is not within the words ‘ any yearly interest of money or any annuity or other annual payment ‘ in 16 and 17 Viet. c. 34, s. 40, and therefore the customer is not . .
Cited – Target Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
Cited – Jefford v Gee CA 4-Mar-1970
The courts of Scotland followed the civil law in the award of interest on damages. The court gave examples of the way in which they apply the ex mora rule when calculating the interest payable in a judgment. If money was wrongfully withheld, then . .
Cited – Corinthian Securities Ltd v Cato CA 1970
Lord Denning MR said: ‘The words ‘short loan’ are not used in the statute: it is a mistake to place too much emphasis on them. The real question is whether the interest payable is ‘yearly interest of money’. Interest is ‘yearly interest of money’ . .
Cited – In Re T Cooper CA 2-Jun-1911
. .
Cited – Inland Revenue Commissioners v Barnato CA 1936
The case concerned the liability of Captain Barnato for super-tax on the sums which he received under a judgment for an account against his former partners in the dissolved firm of Barnato Brothers. The sums found due on the taking of the account . .
Cited – Mayor and Others of Gateshead v Lumsden CA 10-Mar-1914
The plaintiffs, as the urban authority of a borough, had under s. 150 of the Public Health Act, 1875, and the Gateshead Improvement Act 1867, some years before action brought paved and made up certain streets, and had from time to time apportioned . .
Cited – Riches v Westminster Bank Ltd HL 1947
The amount of interest payable on compulsory purchase of land depends upon the value given to the land and the length of the period from the time of entry until reinstatement, the period during which the claimant is dispossessed. During that time, . .
Cited – Moss Empires Ltd v Inland Revenue Comrs HL 1937
Lord Maugham said that for a payment to be an ‘annual payment’ within the meaning of rule 21 it ‘must be taken to have, like interest on money or an annuity, the quality of being recurrent or being capable of recurrence’. . .
Cited – Garston Overseers v Carlisle 1915
The question was as to the scope of the words ‘yearly interest’ used in the Income Tax Acts of 1842 and 1853. The bankers of certain overseers for the poor allowed the latter by arrangement half-yearly interest at an agreed-on rate on the daily . .
Cited – Barlow v Inland Revenue Commissioners 1937
. .

Lists of cited by and citing cases may be incomplete.

Insolvency, Income Tax

Updated: 17 January 2022; Ref: scu.634513

Barnes v Revenue and Customs: FTTTx 31 Jan 2011

Income tax – tax avoidance scheme – chargeability of interest income under s 18 ICTA 1988 – relief under the accrued interest provisions of Chapter II of Part XVII ICTA 1988 – deductibility of a payment under the manufactured interest provisions of schedule 23A ICTA 1988

[2011] UKFTT 95 (TC), [2011] SFTD 443, [2011] STI 1622
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.442787

Kunjur v Revenue and Customs (Employment Income, Whether Expenditure On Accommodation): FTTTx 7 Oct 2021

Employment income, whether expenditure on accommodation for a trainee maxillofacial surgeon was wholly, exclusively and necessarily for the purpose of employment. Whether penalties are payable by reason of failure to take reasonable care. Appeal allowed in part.

[2021] UKFTT 362 (TC)
Bailii
England and Wales

Income Tax

Updated: 17 January 2022; Ref: scu.669769

Moss Empires Ltd v Inland Revenue Comrs: HL 1937

Lord Maugham said that for a payment to be an ‘annual payment’ within the meaning of rule 21 it ‘must be taken to have, like interest on money or an annuity, the quality of being recurrent or being capable of recurrence’.

Lord Maugham
[1937] AC 785, [1937] 3 All ER 381
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671251

In Re T Cooper: CA 2 Jun 1911

(1911) 2 KB 550, [1911] UKLawRpKQB 118
Commolii
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Income Tax

Updated: 17 January 2022; Ref: scu.671256

Sadler v the South Staffordshire and Birmingham District Steam Tramways Co: CA 26 Jun 1889

Interest upon a loan by a banker to a customer for a period of less than a year is not within the words ‘ any yearly interest of money or any annuity or other annual payment ‘ in 16 and 17 Viet. c. 34, s. 40, and therefore the customer is not entitled to deduct income tax from such interest. So held, reversing the decision of the Queen’s Bench Division

[1889] UKLawRpKQB 113, (1889) 23 QBD 324
Commonlii
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671257

Corinthian Securities Ltd v Cato: CA 1970

Lord Denning MR said: ‘The words ‘short loan’ are not used in the statute: it is a mistake to place too much emphasis on them. The real question is whether the interest payable is ‘yearly interest of money’. Interest is ‘yearly interest of money’ whenever it is paid on a loan which is in the nature of an investment no matter whether it is repayable on demand or not.’ and: ‘Looking at the agreement in this case, it is plain to me that this loan was made as an investment. Although payable on demand, it was unlikely that any demand would be made so long as the interest payments were kept up. It was a loan on the security of property, indistinguishable in principle from an ordinary loan or mortgage. The interest was ‘yearly interest of money’.’

Lord Denning Mr
[1970] 1 QB 377
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671250

Bebb v Bunny: 22 Dec 1854

A purchaser liable to pay interest on his purchase-money may deduct income tax from such interest. It was the practice to deduct the tax from the interest on debts upon promissory notes and the like in the offices of the Masters in Chancery. The tax is not deducted on payment of purchase-money into Court ; but the purchaser, it seems, may apply to have it deducted when the purchase-money is paid out of Court. The words ‘ yearly interest ‘ in s. 40 of 16 and 17 Vict. e. 34, mean, not only interest accruing de anno in annum, but any interest at; a fixed rate per cent. per annum, though accruing de die in diem.

[1854] EngR 1040, (1854) 1 K and J 216, (1854) 69 ER 436
Commonlii
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.293897

Garston Overseers v Carlisle: 1915

The question was as to the scope of the words ‘yearly interest’ used in the Income Tax Acts of 1842 and 1853. The bankers of certain overseers for the poor allowed the latter by arrangement half-yearly interest at an agreed-on rate on the daily balances standing at their credit. The overseers claimed exemption for income tax in respect of the interest, on the ground that it was ‘yearly interest’ within the meaning of the Income Tax Act 1842.
Held: The claim was negatived by the Court. Rowlatt, J said: ‘What is the daily balance? It is not even a short loan, it is merely money at call, money payable on demand . . This is not yearly interest.’
Rowlatt J said: ‘The broad result of the decisions in those cases is, I think, that yearly interest means, substantially, interest irrespective of the precise time in which it is collected, interest on sums which are outstanding by way of investment as opposed to short loans or as opposed to moneys presently payable and held over or anything of that kind.’ and: ‘They (the overseers) are to levy rates as far as they can for their current expenditure. However, they must necessarily keep a small balance in hand, and they get interest upon it under the arrangements which the bank were willing to make. It is no doubt contemplated that the balance will continue for a long time; but what is the daily balance? It is not even a short loan; it is merely money at call, money payable on demand.’

Rowlatt J
[1915] 3 KB 381
Income Tax Act 1853, Income Tax Act 1842
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671254

Mayor and Others of Gateshead v Lumsden: CA 10 Mar 1914

The plaintiffs, as the urban authority of a borough, had under s. 150 of the Public Health Act, 1875, and the Gateshead Improvement Act 1867, some years before action brought paved and made up certain streets, and had from time to time apportioned the expenses thereof among the owners of the premises fronting thereon. The defendant was the owner of premises in these streets, and the plaintiffs, under the power conferred upon them by s. 32 of the Gateshead Improvement Act, 1867, allowed him time for the repayment of the sums apportioned in respect of his premises, interest being payable thereon at the rate of 5 per cent, per annum. The defendant paid to the plaintiffs varying sums at irregular intervals in part payment of the amount due, which the plaintiffs credited in the first place to the interest due and in the second place towards payment of the principal. There was no evidence to shew that the plaintiffs made a regular practice of allowing these expenses to remain unpaid, bearing interest, as a mode of investing their funds. The defendant claimed, upon paying off the final amount due for principal and interest, to be entitled to deduct the income tax upon the amount due for interest as being ‘yearly interest of money’ within s. 40 of the Income Tax Act, 1853.
Held: the interest did not come within the words ‘ yearly interest of money ‘ in s. 40, and that therefore the defendant was not entitled to deduct income tax therefrom.

[1914] UKLawRpKQB 72, (1914) 2 KB 883
Commonlii
England and Wales
Cited by:
Cited – Revenue and Customs v Joint Administrators of Lehman Brothers International (Europe) SC 13-Mar-2019
The Court was asked whether interest payable under rule 14.23(7) of the Insolvency Rules 2016 is ‘yearly interest’ within the meaning of section 874 of the Income Tax Act 2007. If so, the administrators must deduct income tax before paying interest . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 January 2022; Ref: scu.671255

Townend v Revenue and Customs (Income Tax/Corporation Tax : Penalty): FTTTx 22 Apr 2016

FTTTx INCOME TAX – Penalty assessment (s 95 Taxes Management Act 1970) – Relevance of Offshore Disclosure Facility – Calculation of tax difference – Appropriate levels of abatement for disclosure, co-operation and seriousness – Appeal dismissed

[2016] UKFTT 276 TC
Bailii
Taxes Management Act 1970 95
England and Wales

Income Tax, Taxes Management

Updated: 16 January 2022; Ref: scu.564359

Catal v Revenue and Customs (Income Tax/Corporation Tax : Appeal): FTTTx 6 May 2016

Ftttx INCOME TAX – late submission of tax returns – assessments under Section 36 Taxes Management Act 1970 – imposition of penalties under Schedule 41 to Finance Act 2008 – whether properly notified by HMRC – no – penalties imposed under Schedule 56 to Finance Act 2009 – whether reasonable excuse – no – whether appeal can be made against interest charged under Section 86 Taxes Management Act 1970 – no

[2016] UKFTT 311 TC
Bailii
Taxes Management Act 1970
England and Wales

Income Tax, Taxes Management

Updated: 16 January 2022; Ref: scu.564363

Mabbutt v Revenue and Customs (Income Tax/Corporation Tax : Appeal): FTTTx 5 May 2016

FTTTx SELF ASSESSMENT – notice of enquiry into return given under Section 9A Taxes Management Act 1970 – whether notice of enquiry valid if return incorrectly described in notice – no – whether notice saved by Section 114 Taxes Management Act 1970 – no

[2016] UKFTT 306 TC
Bailii
England and Wales

Income Tax

Updated: 16 January 2022; Ref: scu.564368

Christianuyi Ltd and Others v Revenue and Customs (Income Tax/Corporation Tax : Employment Income): FTTTx 21 Apr 2016

INCOME TAX – whether appellants were managed service companies – s. 61 B(2) Income Tax (Earnings and Pensions) Act 2003 (‘ITEPA’)- whether a managed service company provider was ‘involved’ with the appellants – whether the provider ‘benefits financially’ from the provision of services by the individual – the meaning of ‘influences or controls’ – appeals dismissed

[2016] UKFTT 272 TC
Bailii
Income Tax (Earnings and Pensions) Act 2003
England and Wales

Income Tax

Updated: 16 January 2022; Ref: scu.564341

Fessal v Revenue and Customs (Income Tax/Corporation Tax : Human Rights): FTTTx 26 Apr 2016

FTTTx INCOME TAX – self-assessment – barrister – move from cash to true and fair basis – overpayment tax year between two underpayment tax years – tax paid twice on same profits – application of European Convention on Human Rights and Human Rights Act 1998 – held Section 29 of the Taxes Management Act 1970 to be construed in accordance with rights – appeal allowed to the extent of the double payment

[2016] UKFTT 285 TC
Bailii
England and Wales

Income Tax

Updated: 16 January 2022; Ref: scu.564347

Bediako v Revenue and Customs (Income Tax/Corporation Tax : Assessment/Self-Assessment): FTTTx 25 Apr 2016

FTTTx INCOME TAX – employers deducted correct tax from Appellant under PAYE – self-assessment return completed incorrectly by accountant – closure notice and amendment to return – appeal against amendment dismissed – whether appellant careless – failure of accountant to understand self-assessment system – whether penalty should be mitigated – Tribunal’s jurisdiction over mitigation – role of accountant – penalty uph

[2016] UKFTT 280 TC
Bailii
England and Wales

Income Tax

Updated: 16 January 2022; Ref: scu.564339

Regina v Inland Revenue Commission ex parte Preston; In re Preston: HL 1984

Duty of Fairness to taxpayer – Written Assurance

The applicant was assured by the Inland Revenue that it would not raise further inquiries on certain tax affairs if he agreed to forgo interest relief which he had claimed and to pay a certain sum in capital gains tax.
Held: Where the lawfulness of the section 9A notice was itself in issue, neither the question of a section 19A notice nor of an appeal against it arose. Judicial review can be competent in exceptional circumstances, where the challenges to the decisions include assertions that there has been an abuse of power and unreasonableness.
The House considered the availability of judicial review alongside a statutory right of appeal: ‘The court can only intervene by judicial review to direct the Commissioners to abstain from performing their statutory duties or from exercising their statutory powers if the court is satisfied that ‘the unfairness’ of which the applicant complains renders the insistence by the Commissioners on performing their duties or exercising their powers an abuse of power by the Commissioners’.
Where a public body gives undertakings which conflict with its statutory duty, it was in principle entitled to go back on the undertaking. However, if the authority made an assurance and then exercised its statutory power in a manner which caused unfairness, that exercise could be viewed as an abuse of power and the undertaking upheld by the courts.
Lord Templeman: ‘In the present case, the appellant does not allege that the commissioners invoked section 460 for improper purposes or motives or that the commissioners misconstrued their powers and duties. However, the HTV case and the authorities there cited suggest that the commissioners are guilty of ‘unfairness’ amounting to an abuse of power if by taking action under section 460 their conduct would, in the case of an authority other than Crown authority, entitle the appellant to an injunction or damages based on breach of contract or estoppel by representation. In principle I see no reason why the appellant should not be entitled to judicial review of a decision taken by the commissioners if that decision is unfair to the appellant because the conduct of the commissioners is equivalent to a breach of contract or a breach of representation. Such a decision falls within the ambit of an abuse of power for which in the present case judicial review is the sole remedy and an appropriate remedy. There may be cases in which conduct which savours of breach of conduct or breach of representation does not constitute an abuse of power; there may be circumstances in which the court in its discretion might not grant relief by judicial review notwithstanding that conduct which savours of breach of contract or breach of representation. In the present case, however, I consider that the appellant is entitled to relief by way of judicial review for ‘unfairness” amounting to abuse of power if the commissioners have been guilty of conduct equivalent to a breach of contract or breach of representations on their part.’

Lords Scarman and Templeman
[1985] AC 835, [1984] UKHL 5, [1985] BTC 208, [1984] 3 WLR 945, [1985] 2 All ER 327
Bailii
Income and Corporation Taxes Act 1970
England and Wales
Citing:
Cited – HTV Ltd v Price Commission CA 1976
Policies created by public bodies are a means of promoting consistency while not fettering the discretion of a public body. They allow others to know how the authority will respond to those who must deal with the authority. In maiing such policies: . .

Cited by:
Cited – Regina v Beatrix Potter School ex parte Kanner Admn 20-Dec-1996
The applicant’s child had been offered a place by the respondent. The offer was withdrawn.
Held: The school when deciding was entitled to look to the need for efficiency in education. On appeal, the committee may go against that need. The . .
Cited – Regina (G) v Immigration Appeal Tribunal; Regina (M) v Immigration Appeal Tribunal Admn 25-Mar-2004
The applicants sought judicial review of the Immigration Appeal Tribunal’s refusal of leave to appeal. The court had to decide whether such a right survived section 101 of the 2001 Act.
Held: The right to have a judicial review could only be . .
Cited – UK Tradecorp Ltd, Regina (on the Application of) v Commissioners for Customs and Excise Admn 10-Nov-2004
The trader had traded in zero-rated goods, leading to a net reclaim of input tax. Having submitted a claim, it sought repayment, and interest on the sums withheld.
Held: No duty fell upon the commissioners until they had accepted the claim to . .
Cited – Rashid, Regina (on the Application of) v Secretary of State for the Home Department CA 16-Jun-2005
The Home Secretary appealed against a grant of a judicial review to the respondent who had applied for asylum. The court had found that two other asylum applicants had been granted leave to remain on similar facts and on the appellants, and that it . .
Cited – Regina (Nadarajah) v Secretary of State for the Home Department; Abdi v Secretary of State for the Home Department CA 22-Nov-2005
The asylum applicant challenged a certificate given by the respondent that the claim for asylum was manifestly ill-founded. The respondent had made a mistake in applying the appropriate policy, but had sought to correct the error. The claimants . .
Cited – 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 . .
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 . .
Cited – Mills and Another, Regina (on The Application of) v Sussex Police and Another Admn 25-Jul-2014
The claimants faced criminal charges involving allegations of fraud and corruption. They now challenged by judicial review a search and seizure warrant saying that it was unlawful. A restraint order had been made against them and they had complied . .
Cited – 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 . .
Cited – Gallaher Group Ltd and Others, Regina (on The Application of) v The Competition and Markets Authority SC 16-May-2018
No Administrative Duty of Equal Treatment
Extent and consequences of duties of ‘equal treatment’ or ‘fairness’, said to have been owed by the Office of Fair Trading to those subject to investigation under the Competition Act 1998. The respondent had entered negotiations with several parties . .
Cited – Finucane, Re Application for Judicial Review SC 27-Feb-2019
(Northern Ireland) The deceased solicitor was murdered in his home in 1989, allegedly by loyalists. They had never been identified, though collusion between security forces and a loyalist paramilitary was established. The ECHR and a judge led . .

Lists of cited by and citing cases may be incomplete.

Judicial Review, Income Tax

Leading Case

Updated: 16 January 2022; Ref: scu.179860

Dale Services Contracts Ltd v Revenue and Customs: FTTTx 3 May 2012

INCOME TAX-construction industry scheme- application for registration for gross payment – late payment of corporation tax – whether reasonable excuse – ‘reason to expect’ test – whether compliance record of shadow director relevant – cash flow issues – appeal dismissed

[2012] UKFTT 299 (TC)
Bailii
England and Wales

Income Tax

Updated: 15 January 2022; Ref: scu.462732

In Re McGucklan: CANI 23 Feb 2000

A tax inspector applying ex parte for an order allowing the raising of an extended time limit assessment on the grounds of fraud, wilful default or neglect, was obliged to provide the special commissioner with all the information necessary to make the judgment without being misleading or omitting relevant detail. Nevertheless the standard was not the same as for ex parte applications where the consequences would not be limited by the right of appeal of a party.

Times 23-Feb-2000
Northern Ireland

Income Tax

Updated: 14 January 2022; Ref: scu.82053

Lewis v Revenue and Customs (Income Tax/Corporation Tax : Losses): FTTTx 18 Apr 2016

Income Tax – Claim under S 131 Income Tax Act 2007 for Share Loss Relief against income – whether taxpayer subscribed for shares – held yes – whether shares were valueless when acquired by taxpayer – held not – acquisition cost to be determined at market value – appeal allowed

[2016] UKFTT 254 (TC)
Bailii
England and Wales

Income Tax

Updated: 14 January 2022; Ref: scu.562865

Revenue and Customs v Vaines: UTTC 28 Jan 2016

UTTC PARTNERSHIP – whether a member of a limited liability partnership was entitled to deduct a payment of 300,000 Euros (215,455 pounds) to settle German litigation in computing his liability to tax on his share of LLP profits – whether the payment was an expense incurred wholly and exclusively for the purposes of the LLP’s trade or of the individual member’s ‘notional’ trade – whether the payment was revenue or capital expenditure

[2016] UKUT 2 (TCC)
Bailii
England and Wales

Income Tax

Updated: 14 January 2022; Ref: scu.562417

Contour Business Interiors v Revenue and Customs: FTTTx 9 May 2011

Income tax – Construction Industry Scheme – monthly returns – penalties for late submission – whether reasonable excuse – appointment of new agents – notification not received by HMRC – change to paper returns after previous electronic filing not notified to HMRC – paper returns not initially accepted – held reasonable excuse for initial failure but not afterwards – subject thereto, appeal dismissed

[2011] UKFTT 300 (TC)
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.443025

1 Eastmans Ltd v Shaw (H M Inspector of Taxes) ; 2 Eastmans Ltd v Inland Revenue: HL 22 Oct 1928

The Appellant Company carried on business as butchers and meat retailers, the number of their shops varying between 1,447 in 1911 and 804 in 1922. It was shown that it was the Company’s policy to close shops or to open shops in accordance with the needs of their business as a whole, and that it was advantageous to dispose of the fixtures and fittings in a shop given up rather than to transfer them to a newly acquired shop. In such circumstances the Company debited in their trading account the difference between the cost of new fixtures and the price obtained for old fixtures, and these items had been added back in computing the Company’s liability to Income Tax and Corporation Profits Tax.
Held: that no deduction was admissible in computing the Company’s profits in respect of the excess of the cost of new fixtures over the price obtained for the old fixtures.

[1928] UKHL TC – 14 – 218
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.646295

Thuishyanthan v Revenue and Customs (Income Tax/Corporation Tax : Appeal): FTTTx 16 Mar 2016

FTTTx PROCEDURE – direct tax – appeal not notified to HMRC before notice of appeal given to Tribunal – whether an appealable matter – no – to extent that partial notice may have been given, Tribunal not satisfied that permission to give late notification to HMRC should be granted – conduct of proceedings taken into account – in absence of notification to HMRC, no jurisdiction for Tribunal to consider appeal – appeal struck out

[2016] UKFTT 186 (TC)
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.561933

Blue Yearnings Ltd v Revenue and Customs (Income Tax/Corporation Tax : Employment Income): FTTTx 8 Mar 2016

FTTTx INCOME TAX – yacht purchased in company name – was half owned by director-no-was asset made available to director-yes-benefit in kind calculated under s205 ITEPA- national insurance contributions payable by company- appeal dismissed

[2016] UKFTT 167 (TC)
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.561878

Ashcroft v Revenue and Customs: FTTTx 9 Mar 2016

FTTTx Income Tax/Corporation Tax : Assessment/Self-Assessment – Income tax – ITA 2007 ss67(2) and (3), s68 – claim by farmer for trade loss relief against other income -trade losses made consecutively in previous five years – whether reasonable expectation of profit – no – whether sideways relief allowable – no – whether HMRC entitled to issue closure notice – yes – appeal disallowed

[2016] UKFTT 176 (TC)
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.561871

Clark v Revenue and Customs: FTTTx 9 May 2011

PAYE underpayment – elderly unrepresented taxpayer – HMRC awarding two personal allowances – HMRC seeking to collect underpayment via calculation notice – whether calculation notice an ‘assessment’ giving the taxpayer a right of appeal – HMRC application to strike out taxpayer’s appeal – Extra-statutory Concession A19 – HMRC refusal to apply – part of underpayment relating to DWP failure to operate coding notice – whether HMRC can collect underpayment via coding out – threshold for striking out not met – decision to refuse strike out application – direction for oral hearing with submissions on the meaning of ‘assessment’, taxpayer appeal rights and the Tribunal’s jurisdiction

[2011] UKFTT 302 (TC)
Bailii
England and Wales

Income Tax

Updated: 13 January 2022; Ref: scu.443022

Revenue and Customs v Apollo Fuels Ltd and Others and Another: CA 17 Mar 2016

The court was asked whether an employee is liable to income tax in respect of a car leased to him by his employer on arm’s length commercial terms, including lease charges at full market value.

Sharp, Sales, David Richards LJJ
[2016] EWCA Civ 157, [2016] WLR(D) 147
Bailii, WLRD
England and Wales

Income Tax

Updated: 12 January 2022; Ref: scu.561210

Inland Revenue v Whitworth Park Coal Co, Ltd (In Liquidation); Inland Revenue v Ramshaw Coal Co, Ltd (In Liquidation); Inland Revenue v Brancepeth Coal Co, Ltd (In Liquidation): HL 5 Nov 1959

Surtax-Investment company-Computation of actual income-Finance Act, 1922 (12 and 13 Geo. V, c. 17), Section 21 and First Schedule, Paragraph 6; Finance Act, 1927 (17 and 18 Geo. V, c. 10), Section 39 (2); Finance Act, 1939 (2 and 3 Geo. VI, c. 41), Section 14.

[1959] UKHL TC – 38 – 531
Bailii
England and Wales

Income Tax

Updated: 12 January 2022; Ref: scu.559978

Valantine v Revenue and Customs: FTTTx 9 Dec 2011

FTTTx Income Tax – National Insurance Contributions – Value Added Tax – whether Mrs. Valantine was in partnership with her husband, and thus liable as partner for her share of the partnership income tax liabilities and for the whole of the VAT liability of the business, clearly conducted by her husband – Appeal allowed

[2011] UKFTT 808 (TC)
Bailii
England and Wales

Income Tax, VAT

Updated: 12 January 2022; Ref: scu.450964

Baldorino v Revenue and Customs: FTTTx 20 Jan 2012

FTTTx Income tax – employment income – benefits – car leased to employee through agency of employer – s 144 ITEPA- Whitby TC255 not followed – determination of amount of benefits received – taxpayer providing no evidence to displace HMRC conclusions- appeal dismissed.

[2012] UKFTT 70 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 January 2022; Ref: scu.450778

Craig v Revenue and Customs: FTTTx 27 Jan 2012

Income Tax; Enquiry into Self Assessment Return; Amendments to Return; whether deductions should be made for invoices rendered by Appellant’s limited company; whether services actually performed by that company and if so, when performed; principles of generally accepted accounting practice; accruals basis of accounting; computation of profits in accordance with such practice; Finance Act 1998 s42; decision in principle in favour of Respondents in principal outstanding issue in appeal.

[2012] UKFTT 90 (TC)
Bailii
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.451931

Tufail v Revenue and Customs (Income Tax : Claims for Trade Loss Relief v General Income): FTTTx 29 Apr 2020

INCOME TAX – claims for trade loss relief against general income – claims not made in tax returns – claims refused by HMRC – application by HMRC to strike out appeals for lack of jurisdiction – did HMRC enquire into the claims? – Raftopoulou applied – held: no closure notices and so Tribunal has no jurisdiction

[2020] UKFTT 205 (TC)
Bailii
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.651586

Perth and District Five-A-Side League v Revenue and Customs (Income Tax/Corporation Tax : Appeal): FTTTx 17 Feb 2016

FTTTx INCOME TAX – PAYE – penalties for late submission of P35 End of Year Returns for tax years 2009-10, 2010-11 and 2011-12 – whether a reasonable excuse for late appeal to be allowed – No – Sections 49 and 98A Taxes Management Act 1970 – Appeal dismissed.

[2016] UKFTT 102 (TC)
Bailii
Taxes Management Act 1970
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.560233

Nott v Revenue and Customs (Income Tax/Corporation Tax : Income From Land): FTTTx 18 Feb 2016

FTTTx Whether income from letting holiday cottages property or trading income – appropriate tests to be applied – meaning of ‘occupation’ – relevance of HMRC practice in relation to hotels and bed and breakfasts – section 10 ITTOIA – furnished holiday lettings rules – income held to be property income

[2016] UKFTT 106 (TC)
Bailii
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.560232

Revell v Revenue and Customs (Income Tax/Corporation Tax : Assessment/Self-Assessment): FTTTx 16 Feb 2016

FTTTx INCOME TAX- whether appellant served with valid notice to file return – no-whether valid enquiry opened into return and valid closure notice issued – no – appeal allowed – ss 8, 9, 28A, 34 and 115 TMA 1970

[2016] UKFTT 97 (TC)
Bailii
Taxes Management Act 1970 8 9 828A 34 115
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.560235

Reynolds and Gibson v Crompton (H M Inspector of Taxes), Reynolds and Gibson v Inland Revenue: HL 26 Mar 1952

HL Income Tax, Schedule D, and Profits Tax-Profits of trade-Debt taken over at reduced valuation on change of partnership and subsequently recovered in full-Whether profit assessable.
A partnership of cotton brokers had as an asset of their business a debt owed by a customer incurred in the course of their trade. A change in the membership of the partnership gave rise to a technical dissolution of the old partnership and the new partnership acquired the assets and liabilities of the old partnership. The new partnership subsequently collected the debt.
Held: It was not liable to income tax income tax on it because the collection of the debt was not part of the new partnership’s trading operation and thus was not assessable to tax under Case I of Schedule D.

[1952] UKHL TC – 33 – 288, 33 TC 288, (1952) 31 ATC 184, [1952] 1 TLR 922, [1952] TR 169, [1952] 1 All ER 888
Bailii
England and Wales
Cited by:
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 . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 10 January 2022; Ref: scu.560159

Bambridge v Inland Revenue: HL 8 Dec 1955

HL Income Tax and Surtax – Avoidance of tax by transfer of assets abroad -Transfers by third party-Whether rights acquired after death of third party under settlement or will made by him were acquired ‘ by means of ‘ the transfers in conjunction with ‘associated operations’ – Finance Act, 1936 (26 Geo. V and 1 Edw. VIH, c. 34). Section 18.

[1955] UKHL TC – 36 – 313, 36 TC 313
Bailii
Finance Act 1936 18
England and Wales

Income Tax

Updated: 10 January 2022; Ref: scu.560148