FTTTx Income tax – claim for repayment of supposedly overpaid tax – Schedule 1AB and 1A Taxes Management Act 1970 – HMRC issued closure notice rejecting the claim – appeal against HMRC’s rejection of claim – Tribunal not satisfied on the evidence that HMRC’s rejection of the claim was incorrect – appeal dismissed
[2013] UKFTT 665 (TC)
England and Wales
Updated: 03 September 2022; Ref: scu.518628
(Hong Kong)
[1990] UKPC 2
England and Wales
Updated: 02 September 2022; Ref: scu.429799
FTTTX Income tax – Transaction in securities – Contribution by Company to QUEST – Sale by controlling shareholder of shares to QUEST – Notice under ICTAs.703 to counteract tax advantage – Served after enactment of ITA 2007 – Alternative notice under ITA 2007, s.698 – Which notice effective – Whether tax advantage – Whether tax advantage a main object – Appeal dismissed
[2009] UKFTT 238 (TC)
England and Wales
Updated: 02 September 2022; Ref: scu.409048
CIS complaints test – repeated late payment of tax – effects of house building recession on construction industry – whether reasonable excuse – no
[2011] UKFTT 28 (TC)
England and Wales
Updated: 01 September 2022; Ref: scu.428215
Income Tax – company car – whether pool car and whether available for private use – chargeable to Income Tax in respect of car and fuel benefi
[2011] UKFTT 12 (TC)
England and Wales
Updated: 01 September 2022; Ref: scu.428220
Whether expenses deductible as incurred wholly and exclusively for purposes of trade – travel from home to sites to carry out trade as electrician – work done at home in connection with seeking work and preparing quotes – is home a place of business – yes – appeal allowed
[2011] UKFTT 29 (TC)
England and Wales
Updated: 01 September 2022; Ref: scu.428216
CONSTRUCTION INDUSTRY SCHEME – Withdrawal of gross payment status – Appellant did not meet the compliance test – whether Appellant had a reasonable excuse for his failure – No – Appeal dismissed
[2011] UKFTT 14 (TC)
England and Wales
Updated: 01 September 2022; Ref: scu.428224
Income Tax – profits of a business – deductibility of expenses of counselling – whether incurred exclusively for the purposes of the business
[2011] UKFTT 18 (TC)
England and Wales
Updated: 01 September 2022; Ref: scu.428203
UTTC INCOME TAX – Earnings from employment – Whether payment made on TUPE transfer to recognise loss of pension scheme benefits but also to ensure smooth transfer was ‘from employment’ – Whether capital payments could be taxable.
NATIONAL INSURANCE CONTRIBUTIONS – Earnings derived from employment.
[2010]UKUT 457 (TCC)
England and Wales
Updated: 01 September 2022; Ref: scu.428183
SELF ASSESSMENT – return claiming that taxpayer not resident in UK – discovery assessment – validity – TMA s 29 – correct construction – whether statutory requirements satisfied – yes – appeal dismissed
[2010] UKUT 361 (TCC)
England and Wales
Updated: 01 September 2022; Ref: scu.428166
Income Tax – Transaction in securities – Contribution by Company to QUEST – Sale by controlling shareholder of shares to QUEST – Notice under ICTAs.703 to counteract tax advantage – Served after enactment of ITA 2007 – Alternative notice under ITA 2007, s.698 – Which notice effective – Whether tax advantage – Whether tax advantage a main object – yes – Appeal Dismissed
[2010] UKUT 416 (TCC)
England and Wales
Updated: 01 September 2022; Ref: scu.428170
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 or distribution – Class 1 National Insurance Contribution.
Mr Justice Roth and Judge Charles Hellier
[2010] UKUT 251 (TCC), [2010] BTC 1626, [2010] STI 2274, [2010] STC 2343
England and Wales
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 . .
Appeal from – 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 . .
At UTTC – 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.
Updated: 01 September 2022; Ref: scu.428162
The claimants appealed against bankruptcy orders made against assessed liability to income tax and penalties. As solicitors, their practice had suffered intervention, but they argued that their assets comfortably exceeded their liabilities and that they should have been given more time to pay.
Held: They said that as a result of the intervention within their practice, there would be a substantial tax reclaim which would effectively discharge most of the debt and that they could pay the rest. Henderson J said: ‘There is no doubt that the court retains a discretion not to make a bankruptcy order, even where the petition debt has been clearly established and any grounds of opposition have been dismissed. However, the authorities establish that in such circumstances the discretion to adjourn should only be exercised if there is a reasonable prospect of the petition debt being paid in full within a reasonable period: see Harrison v. Segger [2005] EWHC 411 (Ch), [2005] BPIR 583 per Blackburne J, and Re Gilmartin (a bankrupt), ex p bankrupt v. International Agency and Supply Ltd [1989] 2 All ER 835, [1989] 1 WLR 513 per Harman J. Furthermore, as Blackburne J said, ‘[t]here must be credible evidence to support such a prospect if the court is to grant an adjournment for payment.’
Henderson J
[2010] EWHC 13 (Ch), [2010] 2 All ER 126, [2010] STC 657, [2010] STI 230
England and Wales
Updated: 01 September 2022; Ref: scu.392844
Legal expenses incurred by a professional in defending disciplinary proceedings are deductible from taxable profits.
Times 12-May-1997, [1997] EWCA Civ 1627
Income and Corporation Taxes Act 1970 130(a)
England and Wales
Appeal From – McKnight (Inspector of Taxes) v Sheppard; Sheppard v McKnight ChD 21-May-1996
Legal costs and fines not deductible – insufficiently connected with trade. . .
Cited – Strong and Co of Romsey Ltd v Woodifield HL 30-Jul-1906
The company sought to deduct from its trading profits a sum expended paying damages for personal injuries to a visitor to the taxpayer’s Inn. The claim had been rejected.
Held: The company’s appeal failed. Lord Davey said: ‘I think that the . .
Cited – Mallalieu v Drummond HL 27-Jul-1983
The taxpayer was a barrister. To comply with Bar guidance on court dress, she wore, in court and in and to and from chambers black dresses, suits and shoes and white blouses. The clothing were perfectly ordinary articles suitable for everyday wear. . .
Appeal From – McKnight (Inspector of Taxes) v Sheppard HL 18-Jun-1999
The taxpayer sought to set off against tax some pounds 200,000 spent defending professional disciplinary proceedings. The House was asked whether this was ‘money wholly and exclusively laid out or expended for the purposes of the trade.’
Held: . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 September 2022; Ref: scu.142023
Lloyd LJ
[2010] EWCA Civ 1538, [2010] STI 3244, [2011] STC 456, [2011] BTC 1
Income and Corporation Taxes Act 1988 144A, Income Tax (Earnings and Pensions Act) 2003 222
England and Wales
Updated: 31 August 2022; Ref: scu.427973
ECJ Free movement of capital – Income taxes – Transmission of buildings anticipated inheritance – Payment of an annuity to the donor – Taxation of income from the rental property – Deductibility of rent paid to the donor – Condition of be fully taxable in the Member State concerned – unjustified restriction on freedom of movement of capital.
C-450/09, [2010] EUECJ C-450/09, [2011] EUECJ C-450/09
European
Updated: 31 August 2022; Ref: scu.427344
Penalties for non-submission of yearly CIS 36 Returns – No loss of tax to HMRC – Whether reasonable excuse – no – Whether HMRC should have exercised a discretion to mitigate the penalties under Section 102 TMA 1970 – Hardship and proportionality
[2010] UKFTT 409 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.426557
FTTTx VAT AND INCOME TAX – Suppression of takings and who was responsible – was assessment raised to best judgment – yes – was the quantum correct – no – alternative calculation by the tribunal – appeal allowed in part
PENALTY – Section 60 and 61 VAT Act 1994 – appeal dismissed.
[2014] UKFTT 545 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.526947
FTTTx Appeal against HMRC’s decision that travel expenses incurred by a doctor who was on a training programme which required that he rotate to a different hospital each year were not deductible – appeal dismissed – each rotation was a separate permanent employment and the expenses were the normal commuting expenses – the travel was not in the performance of his duties which did not commence until he reached the relevant hospital
Radford TJ
[2011] UKFTT 489 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.449463
FTTTx Income Tax – Deduction of travel expenses and living expenses under ITEPA – employee working on various different main sites for periods of less than 2 years – Appeal allowed
[2014] UKFTT 553 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.526959
FTTTx Income Tax – Strike out application – repayment claims – personal tax returns submitted late -equitable liability claimed – held – equitable liability not available – failure by HMRC to consider equitable relief outside jurisdiction of tribunal- no legal basis on which time limits could be extended -strike out allowed.
[2014] UKFTT 582 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.526929
Penalty for late return of contractor’s monthly return.
[2011] UKFTT 491 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.449459
FTTTx Schedule 56 Finance Act 2009 – penalties for late payment of tax – Appellant says he overlooked payment because of his father’s illness and because he had become unemployed – whether reasonable excuse – no – appeal dismissed
[2014] UKFTT 595 (TC)
England and Wales
Updated: 31 August 2022; Ref: scu.526927
FTTTx Appeal against amended self assessment- whether payments of interest eligible for relief under section 353 Income and Corporation Taxes Act 1988 – whether a loan was used wholly and exclusively for the purposes of business under section 360 (1) (b) Income and Corporation Taxes Act 1988
[2010] UKFTT 441 (TC)
Income and Corporation Taxes Act 1988 353 360(1)(b)
England and Wales
Updated: 31 August 2022; Ref: scu.426597
INCOME TAX – SURCHARGE FOR LATE PAYMENT OF TAX – Whether Appellant had reasonable excuse for default – No – Appeal dismissed.
[2010] UKFTT 461 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426602
Construction Industry Scheme – Appeal against cancellation of registration for gross payment – failure of ‘Compliance test’ – Whether a reasonable excuse on facts – Yes – Appeal allowed – section 66 and schedule 11 Finance Act 2004
[2010] UKFTT 477 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426590
FTTTx Income tax – Employment Income – cars with finance agreements in the name of a limited company – all finance payments entered in directors loan accounts -were cars made available within meaning of s114 ITEPA – yes, car benefit charges apply. Fuel allowances paid then excluded from approved payments s120 ITEPA -subsequent transfer of car to a director is subject to tax under s206 ITEPA. Cost of hire of executive box at football club – was there a benefit in kind to directors-no. Appeals allowed in part
[2010] UKFTT 503 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426615
INCOME TAX – PAYE – NIC – whether a tax saving scheme in which employees agreed to reduced wages linked to receipt of dividends was effective – scheme not put into effect – appeal dismissed.
[2010] UKFTT 422 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426600
Payment of licence fees by company – whether income of inventor or a third party – whether trading income of inventor (yes) – whether employment income of inventor (no) – whether annual payments (no) – whether assessments defective or invalid (no)
[2010] UKFTT 419 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426599
INCOME TAX – adjustments to self assessment – discovery assessment – fairness of estimates by HMRC – appeal dismissed
[2010] UKFTT 428 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426586
INCOME TAX AND NI – understated self-assessment – appeal against amendments and against penalty under section 95 TMA – burden of showing amendment should not stand not discharged – appeal dismissed
[2010] UKFTT 459 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426582
FTTTx INCOME TAX – Applications by the parties for further directions – whether departure by HMRC unilaterally from the timetable for preparation for the appeal set down in agreed directions, causing additional delay in bringing the appeal on for hearing to the detriment of partners in the Appellant who had an interest in the outcome of the appeal, made it appropriate for the Tribunal to exercise its discretion to curtail further disclosure requested by HMRC and to refuse to make certain other directions which the Appellant submitted would, if made, lead to further delay – held although HMRC’s departure from the agreed timetable was a subject for criticism, the additional delay was not, in all the special circumstances of the case, sufficient to outweigh the requirement in the interests of justice and fairness for full disclosure – further directions made
[2010] UKFTT 448 (TC)
England and Wales
See Also – Eclipse Film Partners No 35 Llp v Revenue and Customs SCIT 17-Feb-2009
SCIT Closure notice – application for direction to close enquiry into tax return – limited liability partnership – s 28B Taxes Management Act 1970 – direction for closure within three months . .
See Also – Eclipse Film Partners No 35 Llp v Revenue and Customs FTTTx 22-Jun-2011
FTTTx Expert evidence – application for a direction to exclude expert evidence – whether expert evidence inadmissible on grounds that it is an opinion as to UK tax and therefore trespasses on the special . .
See Also – Eclipse Film Partners No 35 Llp v Revenue and Customs FTTTx 20-Apr-2012
FTTTx Income tax – limited liability partnership acquired licence to film rights and sub-licensed rights to distributor – complex financing arrangements involving loans to members of the partnership and . .
See Also – HM Revenue and Customs v Eclipse Film Partners No35 Llp UTTC 22-Mar-2013
UTTC Procedure – costs – whether, in a case where the taxpayer has opted out of the Complex costs regime, the First-tier Tribunal has the power to order that the parties share the costs of the appellant complying . .
See Also – Eclipse Film Partners No 35 Llp v Revenue and Customs CA 26-Feb-2014
The court was asked whether the First-Tier Tribunal (Tax Chamber) had jurisdiction to make an order that the costs of preparing hearing bundles for a substantive appeal by the appellant taxpayer should be shared equally between the taxpayer and the . .
See Also – Eclipse Film Partners No 35 Llp v HM Revenue and Customs CA 17-Feb-2015
Appeal against closure notice. . .
Lists of cited by and citing cases may be incomplete.
Updated: 27 August 2022; Ref: scu.426570
Income Tax – Schedule D – Journalist and author – Expenses – Whether premises costs incurred whilst working and writing a book qualified for a deduction against income from the business – Section 34 Income Tax (Trading and Other Income) Act 2005
[2010] UKFTT 429 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426580
Self assessment – under-declaration of takings – question of fact – taxi driver – whether takings and profit were understated – no – appeal granted
[2010] UKFTT 387(TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426553
Surcharges for late payment of income tax – Whether inability to pay constituted a reasonable excuse – No – Appeal dismissed – Section 59C Taxes Management Act 1970
[2010] UKFTT 392 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426542
INCOME TAX/CORPORATION TAX – Sub-contractors in the construction industry
Mr. Geraint Jones Q.C. (Judge), Mr. Harvey Adams (Member)
[2010] UKFTT 414 (TC)
England and Wales
Updated: 27 August 2022; Ref: scu.426539
Tax credits and family credit
[2013] UKUT 444 (AAC)
England and Wales
Updated: 26 August 2022; Ref: scu.516835
Tax credits and family credit
[2010] UKUT 323 (AAC)
England and Wales
Updated: 25 August 2022; Ref: scu.425175
ACCRUED INCOME SCHEME – short sale of gilts – whether the Appellant ‘becomes and does not cease to be entitled to them on the day’ within s 710(7) TA 1988 – no – accordingly on no day did the nominal value of gilts held by her exceed pounds 5,000 and no charge arises under the accrued income scheme
PRACTICE – Revenue stating its conclusion in the closure notice that Ramsay applied to deny a deduction for manufactured interest – whether it is open to them to abandon the Ramsay argument and contend that instead a charge to tax arises under the accrued income scheme – yes – appeal allowed
[2006] UKSPC SPC00549, [2006] STC (SCD) 543
England and Wales
Updated: 24 August 2022; Ref: scu.242831
The taxpayer sought tax relief for assorted pension contributions. She had made contributions to schemes before and after the 1988 Act. The tax scheme allowed unused allowances to be carried forward. The taxpayer sought to prevent aggregation of the allowances in respect of the separate schemes.
Held: The unused refiefs under each scheme had to be aggregated in each year and any balance carried forward only after deduction of the total of contributions made for that year.
The Honourable Mr Justice Lewison
Times 10-Aug-2004, [2004] 1811 EWHC (Ch)
Income and Corporation Taxes Act 1988 655
England and Wales
Appeal from – Lonsdale v HM Inspector of Taxes CA 17-Jun-2005
The taxpayer, a barrister had paid into both a retirement annuity contract and into a personal pension scheme. She sought to be able to claim full tax relief on all payments.
Held: The two payments were to be aggregated, and only any excess of . .
Lists of cited by and citing cases may be incomplete.
Updated: 24 August 2022; Ref: scu.199480
INCOME TAX – enterprise investment scheme – whether shares carry preferential rights falling within s173(2A) of ITA 2007 – yes – appeal dismissed
[2021] UKUT 14 (TCC)
England and Wales
Updated: 24 August 2022; Ref: scu.658107
In computing company’s tax liability excessive pay not deductible.
Times 28-May-1993
Income and Corporation Taxes Act 1970 130
England and Wales
Appealed to – Earlspring Properties Ltd v Guest (Inspector of Taxes) CA 1-May-1995
A close company has an additional obligation to notify the Revenue that a loan was chargeable to tax, and in default, it was liable for interest. . .
Appeal from – Earlspring Properties Ltd v Guest (Inspector of Taxes) CA 1-May-1995
A close company has an additional obligation to notify the Revenue that a loan was chargeable to tax, and in default, it was liable for interest. . .
Lists of cited by and citing cases may be incomplete.
Updated: 24 August 2022; Ref: scu.80214
The increase of percentage of time from part time to full time occupation, could not itself constitute a material change so as to be treatable as a new profession.
Times 25-Nov-1997, Gazette 19-Nov-1997
England and Wales
Updated: 24 August 2022; Ref: scu.80258
FTTTx Income Tax – Foreign Earnings deduction for Seafarers – Whether a vessel, accepted to be a ship on ordinary principles was an ‘offshore installation’ such that it was precluded from being classed as a ‘ship’, with the result that employees engaged on it were not entitled to the Foreign Earnings Deduction for Seafarers under s.192A ICTA 1988, and s.378 ITEPA 2003 – Appeal dismissed.
[2010] UKFTT 373 (TC)
Income and Corporation Taxes Act 1988 192A
England and Wales
Updated: 23 August 2022; Ref: scu.422370
FTTTx Income Tax – surcharge for late payment of tax – s.59(C)(2) TMA 1970 – erroneous advice by tax advisor – whether a reasonable excuse – no – whether subsequent carry back losses disturbed surcharge penalty already assessed – no.
[2010] UKFTT 376 (TC)
England and Wales
Updated: 23 August 2022; Ref: scu.422361
FTTTx BUILDING CONTRACTORS – Construction Industry Scheme – failure to operate scheme in respect of sub-contractor – no CIS returns made – sub-contractor paid gross – whether Appellant entitled to relief under Regulation 9.1 (CIS) Regulations 2005 – answer no – appeal dismissed
Ian Vellins J
[2010] UKFTT 212 (TC)
Updated: 23 August 2022; Ref: scu.422231
FTTTx INCOME TAX – EMPLOYMENT INCOME – EXPENSES – specialist registrar in urology on a six year training programme within the NHS – appellant based at one hospital and undertaking rotational appointments at other hospitals – payment by employer, in respect of travel from place where living to place of rotational appointment, of mileage in excess of distance to base hospital – whether tax exempt as removal benefits or removal expenses (ITEPA s.271) – in the circumstances of the case, no – whether tax exempt under the travel expenses rules (ITEPA ss.337 to 339) – in the circumstances of the case, no – emergency call out fees – whether tax exempt (ITEPA ss. 62 and 338) – in the circumstances, yes, up to a limit of 40 pence per mile (ITEPA ss. 229 and 230)
[2010] UKFTT 283 (TC), [2010] STI 2517, [2010] SFTD 1063
Updated: 23 August 2022; Ref: scu.422288
INCOME TAX : Surcharge – Late payment of income tax – Whether HMRC gave an undertaking not to charge penalties – no – no reasonable excuse for defaults – section 59C Taxes Management Act 1970
[2010] UKFTT 221 (TC)
England and Wales
Updated: 23 August 2022; Ref: scu.422248
DIY Builders Scheme – Section 35(1A)(a), Note (2)(b), Note 16 (a) and (b), meaning of word wholly – VAT Notice 719 4.1.2, loft conversion
[2010] UKFTT 355 (TC)
England and Wales
Updated: 23 August 2022; Ref: scu.422316
FTTTx Income tax – fixed first and second penalties for late filing of partnership return for 2007-08 – was notice to submit return given? – yes – did Appellant have reasonable excuse for failure to submit? – initially yes, but not for whole period of default – appeal dismissed in relation to both first and second penalties
[2010] UKFTT 310 (TC)
Updated: 23 August 2022; Ref: scu.422314
FTTTx DIRECT TAX – whether payment of andpound;76,872 paid by company in lieu of notice was a contractual payment – if so, the andpound;30,000 tax free threshold did not apply – payment contractual – appeal dismissed
David Steel Porter J
[2010] UKFTT 346 (TC)
Updated: 23 August 2022; Ref: scu.422310
FTTTx Income Tax: Post Office Network Reinvention Programme Closure Scheme – payment upon resignation as subpostmaster – s401 Income Tax (Earning and Pensions) Act 2003 – no deduction other than under s403 – Appeal refused.
[2010] UKFTT 180 (TC)
Updated: 23 August 2022; Ref: scu.422166
Contractors Return – Late filing penalty – Change of accountant – New accountant unable to obtain information from previous accountant – whether reasonable excuse throughout period of default – No – Whether Return filed without unreasonable delay after excuse ceased – No – Appeal dismissed – sections 98A and 118(2) Taxes Management Act 1970
[2010] UKFTT 185 (TC)
England and Wales
Updated: 23 August 2022; Ref: scu.422204
FTTTx CONSTRUCTION INDUSTRY SCHEME – Appellant suffered a debt of andpound;200,000 in 2003 – failed compliance test Finance Act 2004 Schedule 11 paragraph 12 for periods 19/07/07 to 18/07/08 – bad debt and potential closure of business not reasonable excuses – appeal dismissed
[2010] UKFTT 147 (TC)
England and Wales
Updated: 23 August 2022; Ref: scu.422161
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 court set out to reconcile the apparently conflicting decision in Decadt.
Hooper, Rimer, Pitchford LJJ
[2010] EWCA Civ 843
ncome and Corporation Taxes Act 1988
England and Wales
Appeal from – 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 . .
See Also – 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, . .
Cited – Blackwell (HM Inspector of Taxes) v Mills 1945
. .
Cited – Revenue and Customs Commissioners v Decadt ChD 2008
The taxpayer, a general surgical registrar, had a contract, requiring him to attend training courses and to obtain a specialist training certificate in order to qualify as a consultant surgeon. Clause 6 of his contract recorded that he had been . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 August 2022; Ref: scu.421109
Action by HMRC to recover a statutory debt of some pounds 2.7m, which they claim to be due pursuant to a notice of assessment
Floyd J
[2009] EWHC 3433 (Ch), [2009] STI 2929, [2010] BTC 33, [2010] STC 236
England and Wales
Updated: 22 August 2022; Ref: scu.401890
An Inspector of Taxes could go back on an agreed assessment which was based on misleading information provided by taxpayer.
Gazette 10-Mar-1993, Ind Summary 22-Mar-1993
England and Wales
Updated: 21 August 2022; Ref: scu.80983
The Council sought charitable status for its activities of reporting the law. The Revenue appealed against the decision by Foster J that the Council ought to be registered as a charity.
Held: The appeal failed. The company should have charitable status. Although it was selling subscriptions, the trading profits were not distributed to members, and the purposes were charitable.
Russell LJ rejected the argument that the purpose of the company was to provide lawyers with the tools of their trade: ‘It seems to me that if the publication of reliable reports of decisions of the courts is for the benefit of the community and of general public utility in the charitable sense, it is an inevitable and indeed necessary step in the achievement of that benefit that the members of the legal profession are supplied with the tools of their trade. I do not see how the benefit to the public, assuming it to be a charitable object, could otherwise be achieved.’
He continued: ‘ I come now to the question whether, if the main purpose of the council is, as I think it is, to further the sound development and administration of the law in this country, and if, as I think it is, that is a purpose beneficial to the community or of general public utility, that purpose is charitable according to the law of England and Wales.
On this point the law is rooted in the Statute of Elizabeth I, a statute the object of which was the oversight and reform of abuses in the administration of property devoted by donors to purposes which were regarded as worthy of such protection as being charitable. The preamble to the Statute listed certain examples of purposes worthy of such protection. These were from an early stage regarded merely as examples, and have through the centuries been regarded as examples or guideposts for the courts in the differing circumstances of a developing civilisation and economy. Sometimes recourse has been had by the courts to the instances given in the preamble in order to see whether in a given case sufficient analogy may be found with something specifically stated in the preamble, or sufficient analogy with some decided case in which already a previous sufficient analogy has been found. Of this approach perhaps the most obvious example is the provision of crematoria by analogy with the provision of burial grounds by analogy with the upkeep of churchyards by analogy with the repair of churches. On other occasions a decision in favour or against a purpose being charitable has been based in terms upon a more general question whether the purpose is or is not within ‘the spirit and intendment’ of the Statute of Elizabeth I and in particular its preamble. Again (and at an early stage in development) whether the purpose is within ‘the equity’ or within ‘the mischief’ of the Statute. Again whether the purpose is charitable ‘in the same sense’ as purposes within the [purview] of the Statute. I have much sympathy with those who say that these phrases do little of themselves to elucidate any particular problem. ‘Tell me’, they say, ‘what you define when you speak of spirit, intendment, equity, mischief, the same sense, and I will tell you whether a purpose is charitable according to law. But you never define. All you do is sometimes to say that a purpose is none of these things. I can understand it when you say that the preservation of sea walls is for the safety of lives and property, and therefore by analogy the voluntary provision of lifeboats and fire brigades are charitable. I can even follow you as far as crematoria. But these other generalities teach me nothing.’
I say I have much sympathy for such approach: but it seems to me to be unduly and improperly restrictive. The Statute of Elizabeth I was a statute to reform abuses: in such circumstances and in that age the courts of this country were not inclined to be restricted in their implementation of Parliament’s desire for reform to particular examples given by the Statute: and they deliberately kept open their ability to intervene when they thought necessary in cases not specifically mentioned, by applying as the test whether any particular case of abuse of funds or property was within the ‘mischief’ or the ‘equity’ of the Statute.
For myself I believe that this rather vague and undefined approach is the correct one, with analogy, its handmaid, and that when considering Lord Macnaghten’s fourth category in Pemsel’s case of ‘other purposes beneficial to the community’ (or as phrased by Sir Samuel Romilly (then Mr. Romilly) in argument in Morice v. Bishop of Durham: ‘objects of general public utility’) the courts, in consistently saying that not all such are necessarily charitable in law, are in substance accepting that if a purpose is shown to be so beneficial or of such utility it is prima facie charitable in law, but have left open a line of retreat based on the equity of the Statute in case they are faced with a purpose (e.g. a political purpose) which could not have been within the contemplation of the Statute even if the then legislators had been endowed with the gift of foresight into the circumstances of later centuries.
In a case such as the present, in which in my view the object cannot be thought otherwise than beneficial to the community and of general public utility, I believe the proper question to ask is whether there are any grounds for holding it to be outside the equity of the Statute: and I think the answer to that is here in the negative. I have already touched upon its essential importance to our rule of law. If I look at the somewhat random examples in the preamble to the Statute I find in the repair of bridges, havens, causeways, sea banks and highways examples of matters which if not looked after by private enterprise must be a proper function and responsibility of government, which would afford strong ground for a statutory expression by Parliament of anxiety to prevent misappropriation of funds voluntarily dedicated to such matters. It cannot I think be doubted that if there were not a competent and reliable set of reports of judicial decisions, it would be a proper function and responsibility of government to secure their provision for the due administration of the law. It was argued that the specific topics in the preamble that I have mentioned are all concerned with concrete matters, and that so also is the judicially accepted opinion that the provision of a court house is a charitable purpose. But whether the search be for analogy or for the equity of the Statute this seems to me to be too narrow or refined an approach. I cannot accept that the provision, in order to facilitate the proper administration of the law, of the walls and other physical facilities of a court house is a charitable purpose, but that the dissemination by accurate and selective reporting of knowledge of a most important part of the law to be there administered is not.’
Russell, Sachs and Buckley LJJ
1969 I No 5934, [1972] Ch 73, [1971] EWCA Civ 13, [1971] 3 WLR 853, [1971] 3 All ER 1029
Charities Act 1960 4, Statute of Charitable Uses 1601
England and Wales
Cited – Morice v The Bishop of Durham CA 26-Mar-1804
Bequest, in trust for such objects of benevolence and liberality as the trustee in his own discretion shall most approve, cannot be supported as a charitable Legacy ; and is therefore a Trust for the next of kin.
Ann Cracherade by her Will, . .
Cited – Income Tax Special Commissioners v Pemsel HL 20-Jul-1891
Charitable Purposes used with technical meaning
The House was asked whether, in a taxing statute applying to the whole of the United Kingdom and allowing for deductions from and allowances against the income of land vested in trustees for charitable purposes, the words ‘charitable purposes’ . .
Cited – Helena Partnerships Ltd v HM Revenue and Customs CA 9-May-2012
The company had undertaken substantial building works and sought associated tax relief. The court was asked whether, following a change in the company’s memorandum and articles of association, the company, a registered social landlord, remained a . .
Lists of cited by and citing cases may be incomplete.
Updated: 19 August 2022; Ref: scu.197875
In the tax year 1974/75 a taxpayer company voted to award bonuses to its two directors and controlling shareholders and credited the sums to accounts with the company from which the directors were free to draw. The directors did not draw on those sums. The Inland Revenue assessed the company to tax, arguing that the company should have deducted tax under the PAYE system on the full sums credited to those accounts.
Held: The assessment was upheld. The word ‘payment’ had no one settled meaning but took its colour from its context. There was no need for the directors to withdraw the money from their loan accounts for there to have been payment by the company, stating: ‘when money is placed unreservedly at the disposal of directors by a company, that is equivalent to payment’. Different considerations would have arisen if the company had required a further decision by the board of directors or by the shareholders in general meeting before the money could have been withdrawn.
Walton J
[1979] 2 All ER 927, [1979] 3 WLR 68, [1979] AC 731, (1980) RPC 31, [1978] TR 477, [1979] 2 All ER 73, [1979] 1 WLR 409, 52 TC 522, [1979] STC 129, [1978] UKHL TC – 52 – 522
England and Wales
Approved – 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.
Updated: 18 August 2022; Ref: scu.642457
Channell J construed an employer’s scheme, which provided for payments into a provident fund for payment to employees on their retirement, as providing for an agreed application of part of the employee’s salary and held that the payments into the fund were therefore taxable as emoluments for services provided in the year of payment into the fund.
Channell J
[1904] EWHC KB 1
England and Wales
Updated: 18 August 2022; Ref: scu.642456
INCOME TAX-late filing of tax return- penalties-whether reasonable excuse
[2019] UKFTT 546 (TC)
England and Wales
Updated: 18 August 2022; Ref: scu.641343
Income Tax, Schedule E-Income Tax on employees’ Hilaries voluntarily paid by company – Income Tax Act, 1842 (5 and 6 Viet., c. 35), Section 146, Schedule E-Income Tax Act, 1853 (16 and 17 Viet., c. 34), Section 2, Schedule E.
[1926] UKHL TC – 10 – 247, (1926) 24 Ll L Rep 94, 10 TC 247, [1926] AC 289
England and Wales
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.
Updated: 18 August 2022; Ref: scu.633829
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 company’s appeal failed. The purposive approach to the interpretation of the general provisions of ICTA and ITEPA in relation to emoluments or earnings was not excluded by the provisions called in aid by the company. The payments were not shams.
A charge to income tax on employment income can arise when an arrangement gives a third party part or all of the employee’s remuneration.
‘three aspects of statutory interpretation are important in determining this appeal. First, the tax code is not a seamless garment. As a result provisions imposing specific tax charges do not necessarily militate against the existence of a more general charge to tax which may have priority over and supersede or qualify the specific charge. I return to this point towards the end of this judgment (paras 68-72 below). Secondly, it is necessary to pay close attention to the statutory wording and not be distracted by judicial glosses which have enabled the courts properly to apply the statutory words in other factual contexts. Thirdly, the courts must now adopt a purposive approach to the interpretation of the taxing provisions and identify and analyse the relevant facts accordingly.’
‘In summary, (i) income tax on emoluments or earnings is due on money paid as a reward or remuneration for the exertions of the employee; (ii) focusing on the statutory wording, neither section 131 of ICTA nor section 62(2)(a) or (c) of ITEPA, nor the other provisions of ITEPA which I have quoted (except section 62(2)(b)), provide that the employee himself or herself must receive the remuneration; (iii) in this context the references to making a relevant payment ‘to an employee’ or ‘other payee’ in the PAYE Regulations fall to be construed as payment either to the employee or to the person to whom the payment is made with the agreement or acquiescence of the employee or as arranged by the employee, for example by assignation or assignment; (iv) the specific statutory rule governing gratuities, profits and incidental benefits in section 62(2)(b) of ITEPA applies only to such benefits; (v) the cases, to which I have referred above, other than Hadlee, do not address the question of the taxability of remuneration paid to a third party; (vi) Hadlee supports the view which I have reached; and (vii) the special commissioners in Sempra Metals (and in Dextra) were presented with arguments that misapplied the gloss in Garforth and erred in adopting the gloss as a principle so as to exclude the payment of emoluments to a third party.’
Lord Neuberger, President, Lady Hale, Deputy President, Lord Reed, Lord Carnwath, Lord Hodge
[2017] UKSC 45, [2017] 4 All ER 654, 2017] BTC 22, 2017 GWD 21-357, [2017] STI 1610, 2017 SCLR 517, [2017] STC 1556, 2017 SLT 799, [2017] WLR(D) 450, [2017] 1 WLR 2767, UKSC 2016/0073
Bailii, WLRD, SC, SC Summary, SC Summary Video, SC 20170315am Video, SC 20170315pm Video, SC 20170316am Video, SC 20170316pm Video
Income and Corporation Taxes Act 1988, Income Tax (Earnings and Pensions) Act 2003 62
Scotland
At FTTTx – Murray Group Holdings and Others v Revenue and Customs FTTTx 29-Oct-2012
FTTTx Income Tax and NIC – Schedule E – emoluments/earnings – tax avoidance scheme – Remuneration Trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments by employer into trust represent . .
AT UTTC – Revenue and Customs v Murray Group Holdings Ltd and Others UTTC 8-Jul-2014
UTTC Income Tax and NIC – emoluments/earnings – tax avoidance scheme – remuneration trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments into sub-trusts were emoluments/earnings subject . .
Appeal from – The Advocate General for Scotland v A Decision of The Upper Tribunal, Re Assessments To Tax Made On Murray Group Holdings Ltd and Others SCS 4-Nov-2015
Second Division Inner House) The AG appealed from a finding that a tax avoidance was not a sham. TH AG brought a new argument, that the payment of the sums to the remuneration trust involved a redirection of the employee’s earnings and accordingly . .
Cited – Hochstrasser (HM Inspector of Taxes) v Mayes ; Jennings v Kinder (HM Inspector of Taxes) HL 20-Nov-1959
A company operated a housing scheme for married employees who made transferred from one part of a country to another. Under the scheme an employee might be offered a loan to assist in the purchase of a house and, provided the house was maintained in . .
Cited – Laidler v Perry HL 8-Apr-1965
HL Income Tax, Schedule E – Christmas gift voucher – Whether assessable – Income Tax Act, 1952 (15 and 16 Geo. VI and 1 Eliz. II, c. 10), Section 156; Finance Act, 1956 (4 and 5 Eliz. II, c. 54), Second Schedule, . .
Cited – 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 . .
Cited – Chinn v Hochstrasser (Inspector of Taxes) HL 11-Dec-1980
The House considered the meaning of the word ‘bounty’ in an income tax context, where it had been used by the courts: ‘My Lords, I would venture to point out that the word ‘bounty’ appears nowhere in the statute. It is a judicial gloss upon the . .
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 . .
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 – Edwards (HM Inspector of Taxes) v Roberts CA 3-Jul-1935
The Respondent was employed by a company under a service agreement dated August, 1921, which provided, inter alia, that, in addition to an annual salary, he should have an interest in a ‘ conditional fund ‘, which was to be created by the company by . .
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 – 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 CA 13-Dec-2002
The taxpayer entered into a sale and leaseback arrangement in respect of a gas pipeline, and sought to set off the costs as a capital allowance.
Held: The company’s appeal succeeded: ‘There is nothing in the statute to suggest that ‘up-front . .
Cited – 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 . .
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 . .
Approved – Garforth (Inspector of Taxes) v Newsmith Stainless Ltd (Chancery Division) ChD 21-Nov-1978
In the tax year 1974/75 a taxpayer company voted to award bonuses to its two directors and controlling shareholders and credited the sums to accounts with the company from which the directors were free to draw. The directors did not draw on those . .
Incorrect – Sempra Metals Ltd v Revenue and Customs SCIT 7-Jul-2008
CORPORATION TAX – computation of profits – deductions – payments by Appellant before 2001 to employee benefit trust and after 2002 to family benefit trust – whether wholly and exclusively expended for the purposes of the Appellant’s trade – yes – . .
Cited – Aberdeen Asset Management Plc v HM Revenue and Customs SCS 23-Oct-2013
Inner House – The Court analysed the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. The . .
Cited – 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 . .
Cited – 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 – 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 . .
Cited – Hartland v Diggines (HM Inspector of Taxes) HL 22-Jan-1926
Income Tax, Schedule E-Income Tax on employees’ Hilaries voluntarily paid by company – Income Tax Act, 1842 (5 and 6 Viet., c. 35), Section 146, Schedule E-Income Tax Act, 1853 (16 and 17 Viet., c. 34), Section 2, Schedule E. . .
Cited – Commissioners of Inland Revenue v The Scottish Provident Institution OHCS 3-Jul-2003
The parties arranged for the issue of cross options for the purchase of gilts, which would prove when exercised to be very tax effective when a new system of taxing such transaction was in place, and planned losses could be set off against taxable . .
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 . .
Approved – Sloane Robinson Investment Services Ltd v Revenue and Customs FTTTx 16-Jul-2012
FTTTx Employees’ bonus payments – whether entitlement to cash or to shares – s 18 and 686 and Part 7 of ITEPA 2003 – s 42 of Companies Act 1985 – tax avoidance scheme – purposive interpretation of statutes – . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 August 2022; Ref: scu.588741
FTTTx Income Tax and NIC – Schedule E – emoluments/earnings – tax avoidance scheme – Remuneration Trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments by employer into trust represent emoluments subject to PAYE and NIC; – (2) whether benefits (particularly loans) derived by employees from the Remuneration Trust represent emoluments subject to PAYE and NIC; – (3) ‘Ramsay’ doctrine – whether applicable – whether trust and loan arrangements artificial and fall to be disregarded; – No – Appeal allowed.
[2012] UKFTT 692 (TC), [2013] SFTD 149, [2013] STI 492
Income and Corporation Taxes Act 1988
Scotland
Appeal from – Revenue and Customs v Murray Group Holdings Ltd and Others UTTC 8-Jul-2014
UTTC Income Tax and NIC – emoluments/earnings – tax avoidance scheme – remuneration trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments into sub-trusts were emoluments/earnings subject . .
At FTTTx – The Advocate General for Scotland v A Decision of The Upper Tribunal, Re Assessments To Tax Made On Murray Group Holdings Ltd and Others SCS 4-Nov-2015
Second Division Inner House) The AG appealed from a finding that a tax avoidance was not a sham. TH AG brought a new argument, that the payment of the sums to the remuneration trust involved a redirection of the employee’s earnings and accordingly . .
At FTTTx – 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.
Updated: 18 August 2022; Ref: scu.570119
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, taxing and insuring the car.
Held: The gross wage was taxable. A barter transaction involving the exchange of goods or services in return for goods or services, may give rise to taxable income in some circumstances. The issue was what is the value to the taxpayer himself of this benefit?
Lord Reid observed that it would be ‘absurd to suppose that a transfer of shares which can immediately be sold to produce money should not be regarded as a perquisite’
Lord Reid, Lord Diplock
[1970] AC 728
England and Wales
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 – 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 – 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.
Updated: 18 August 2022; Ref: scu.546865
FTTTx INCOME TAX – in-month penalties for late payment of PAYE – whether appeal notified late – HMRC’s ‘view of the matter in question’ – whether HMRC had notified the company – failure to notify – effect on time limits and quantum – Agar considered – whether payments made late -reasonable excuse – special circumstances – appeal dismissed – penalty varied.
[2014] UKFTT 667 (TC)
England and Wales
Updated: 18 August 2022; Ref: scu.534288
FTTTx Income Tax – Discovery assessment – Restriction of ‘sideways offset’ of losses derived from capital allowances in respect of yacht chartering, when the lessor had not spent the whole of his time for a 6-month period in the tax year in question in carrying on the trade – Appeal dismissed
[2014] UKFTT 666 (TC)
England and Wales
Updated: 18 August 2022; Ref: scu.534285
The Respondent was employed by a company under a service agreement dated August, 1921, which provided, inter alia, that, in addition to an annual salary, he should have an interest in a ‘ conditional fund ‘, which was to be created by the company by the payment after the end of each financial year of a sum out of its profits to the trustees of the fund to be invested by them in the purchase of the company’s shares or debenture stock. Subject to possible forfeiture of his interest in certain events, the Respondent was entitled (i) to receive the income produced by the fund at the expiration of each financial year, and (ii) to receive part of the capital of the fund (or, at the trustees’ option, the investments representing the same) at the expiration of five financial years and of each succeeding year, and, on death while in the company’s service or on the termination of his employment by the company, to receive the whole amount then standing to the credit of the capital account of the fund (or the actual investments).
The Respondent, with the company’s consent, resigned from its service in September, 1927, and at that date the trustees of the fund transferred to him the shares which they had purchased out of the payments made to them by the company in the years 1922 to 1927. He was assessed to Income Tax under Schedule E for 1927-28 on the amount of the current market value of the shares at the date of transfer. He appealed, contending (1) that, notwithstanding the liability to forfeiture of his interest in certain events, immediately a sum was paid by the company to the trustees of the fund he became invested with a beneficial interest in the payment which formed part of his emoluments for the year in which it was made, and for no other year, and that, accordingly, the amount of the assessment for the year 1927-28 should not exceed the amount paid into the fund during the year of assessment, and (2), alternatively, that the assessment for 1927-28 ought not, in any event, to exceed the aggregate of the sums paid by the company to the trustees, the difference between that amount and the value of the investments at the date of transfer representing a capital appreciation not liable to tax for any year.
Held: (1) that the Respondent did not obtain a vested interest in the yearly payments made to the trustees at the dates when they were respectively made, and (2) that the value of the investments at the date of transfer to the Respondent by the trustees constituted additional remuneration of the year in which the transfer took place.
[1935] EWCA Civ 1, 19 TC 618, (1935) 19 TC 618
England and Wales
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.
Updated: 18 August 2022; Ref: scu.521619
UTTC Income Tax and NIC – emoluments/earnings – tax avoidance scheme – remuneration trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments into sub-trusts were emoluments/earnings subject to PAYE and NIC; -No (2) whether loans from sub-trusts were emoluments/earnings subject to PAYE and NIC; -No (3) ‘Ramsay’ principle – whether FTT erred in law; – No – Case remitted to FTT to determine certain matters, but otherwise appeal dismissed.
[2014] UKUT 292 (TCC), [2014] STI 2409, [2015] STC 1, [2014] BTC 521
Income and Corporation Taxes Act 1988
Scotland
Appeal from – Murray Group Holdings and Others v Revenue and Customs FTTTx 29-Oct-2012
FTTTx Income Tax and NIC – Schedule E – emoluments/earnings – tax avoidance scheme – Remuneration Trust – employees’ individual sub-trusts – ‘protectors’ – (1) whether payments by employer into trust represent . .
Appeal From – The Advocate General for Scotland v A Decision of The Upper Tribunal, Re Assessments To Tax Made On Murray Group Holdings Ltd and Others SCS 4-Nov-2015
Second Division Inner House) The AG appealed from a finding that a tax avoidance was not a sham. TH AG brought a new argument, that the payment of the sums to the remuneration trust involved a redirection of the employee’s earnings and accordingly . .
AT UTTC – 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.
Updated: 18 August 2022; Ref: scu.534525
Inner House – The Court analysed the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. The employing company had accepted that the sums which it had paid though the employee benefits trust to an Isle of Man company were taxable as emoluments and that the scheme was ineffective to reduce the value of those emoluments. The question was whether the employing company was liable to pay the tax under the PAYE system or the benefited employees individually should pay. The issue, to which the gloss was unexceptionably applied, was whether the money in an Isle of Man company, whose shares the employee had acquired through the scheme, was to be treated as being received by the employee so that there was ‘payment’ within the meaning of section 203 of ICTA and the 1993 Regulations.
Held: Lord Drummond Young said: ‘In considering what amounts to payment for the purposes of the PAYE legislation, it is important in my opinion to bear in mind that money is a medium of exchange. In practical terms, therefore, the crucial question is whether funds have been placed in a position where as a practical matter they may be spent by the employee as he wishes; it is at that point that the employee can be said to obtain the benefit of those funds. If the PAYE legislation is construed purposively it is in my view obvious that it is such a benefit that is to be taxed. For this purpose it is not appropriate to deconstruct the precise legal nature of the employee’s rights, drawing fine distinctions according to the methods that he must adopt in order to use the funds for his benefit. The fact that the employee has practical control over the disposal of the funds is sufficient to constitute a payment for the purposes of the legislation.’
Lord Drummond Young, Lord President (Lord Gill) and Lord Glennie
[2013] ScotCS CSIH – 84, 2014 SC 271, 2013 GWD 40-773, [2013] BTC 726, [2014] STC 438, 2014 SLT 54
Scotland
At FTTTx – Aberdeen Asset Management Plc v Revenue and Customs FTTTx 29-Oct-2010
Income Tax; emoluments; money’s worth; transfer of shares; readily convertible asset; Ramsay approach; tax avoidance scheme; Employee Benefit Trust; Discounted Options Scheme for employees in financial services industry; establishment of employee . .
At UTTC – Aberdeen Asset Management Plc v HMRC UTTC 9-Dec-2011
UTTC Income Tax; emoluments; tax avoidance scheme; transfer of shares; whether a payment -No; whether shares a readily convertible asset – Yes; Income and Corporation Taxes Act 1988 sections 1, 19, 131, 202AandB, . .
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.
Updated: 18 August 2022; Ref: scu.517015
FTTTx Employees’ bonus payments – whether entitlement to cash or to shares – s 18 and 686 and Part 7 of ITEPA 2003 – s 42 of Companies Act 1985 – tax avoidance scheme – purposive interpretation of statutes – Ramsay and PA Holdings considered – appeal dismissed
Malachy Cornwell-Kelly TJ
[2012] UKFTT 451 (TC), [2012] SFTD 1181
Companies Act 1985 42, Income Tax (Pay As You Earn) Regulations 2003 80, Income Tax (Earnings and Pensions) Act 2003
England and Wales
Approved – 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.
Updated: 18 August 2022; Ref: scu.466059
UTTC Income Tax; emoluments; tax avoidance scheme; transfer of shares; whether a payment -No; whether shares a readily convertible asset – Yes; Income and Corporation Taxes Act 1988 sections 1, 19, 131, 202AandB, 203, 203A, 203F, The Income Tax (Employments) Regulations 1993 Regulation 2- appeal dismissed
[2012] UKUT 43 (TCC)
Income Tax (Employments) Regulations 1993, Income and Corporation Taxes Act 1988
England and Wales
At FTTTx – Aberdeen Asset Management Plc v Revenue and Customs FTTTx 29-Oct-2010
Income Tax; emoluments; money’s worth; transfer of shares; readily convertible asset; Ramsay approach; tax avoidance scheme; Employee Benefit Trust; Discounted Options Scheme for employees in financial services industry; establishment of employee . .
At UTTC – Aberdeen Asset Management Plc v HM Revenue and Customs SCS 23-Oct-2013
Inner House – The Court analysed the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. The . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 August 2022; Ref: scu.452883
Income Tax; emoluments; money’s worth; transfer of shares; readily convertible asset; Ramsay approach; tax avoidance scheme; Employee Benefit Trust; Discounted Options Scheme for employees in financial services industry; establishment of employee benefit trust; offshore companies established; money box company; family trust established; grant of option by offshore company in favour of family trust; transfer of shares to employee; value of shares; whether existence of family trust diluted value of shares transferred; Income and Corporation Taxes Act 1988 sections 1 19, 131, 202AandB, 203F The Income Tax (Employments) Regulations 1993 Regulation 2; (Pay As You Earn) Regulations 2003 Regulation 80, National Insurance; Social Security Contributions (Transfer of Functions) Act 1999 section 8;
[2010] UKFTT 524 (TC)
England and Wales
At FTTTx – Aberdeen Asset Management Plc v HMRC UTTC 9-Dec-2011
UTTC Income Tax; emoluments; tax avoidance scheme; transfer of shares; whether a payment -No; whether shares a readily convertible asset – Yes; Income and Corporation Taxes Act 1988 sections 1, 19, 131, 202AandB, . .
At FTTTx – Aberdeen Asset Management Plc v HM Revenue and Customs SCS 23-Oct-2013
Inner House – The Court analysed the nature of the rights which a tax avoidance scheme, involving an offshore employee benefits trust and family benefit trusts and shares in Isle of Man companies, had conferred on the relevant employees. The . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 August 2022; Ref: scu.426604
Tax credits and family credit – disabled workers
[2010] UKUT 49 (AAC)
England and Wales
Updated: 17 August 2022; Ref: scu.410609
FTTTx Income tax – whether authorised transfer out of authorised pension schemes – whether sham employment – whether Directions under Reg 72A PAYE regulations properly made – penalty for negligent tax return
[2009] UKFTT 358 (TC)
Updated: 17 August 2022; Ref: scu.409154
FTTTx Income Tax – Earnings from employment -Whether payment made on TUPE transfer to recognise loss of pension scheme benefits but also to avoid industrial action was ‘from employment’ – Whether capital payments could not come from employment – Whether TUPE meant that for ITEPA purposes there was no change in employment – Held, taxable
NIC – Earnings derived from employment – Whether same meaning as ‘from employment’
[2009] UKFTT 379 (TC)
Updated: 17 August 2022; Ref: scu.409155
FTTTx Construction Industry Scheme – penalties for late filing of returns required by paragraph 4 of the Income Tax (Construction Industry Scheme) Regulations 2005 – Reasonable excuse defence under section 118(2) TMA 1970 – No power to mitigate penalties – Preliminary Decision – proportionality issue not argued but considered by the Tribunal – Tribunal in doubt as to whether the statutory provisions satisfy the requirements of the Human Rights law principle of proportionality – Greengate Furniture Ltd. v Customs and Excise [2003] UKVAT V18280 considered – Directions made to list the appeal for further argument on the proportionality issue and on what interpretation of the statutory provisions in issue should be adopted by the Tribunal if it was to conclude that the statutory provisions (or any of them) did not satisfy the Human Rights law principle of proportionality.
[2009] UKFTT 341 (TC)
Updated: 17 August 2022; Ref: scu.409171
INCOME TAX – back duty investigation and assessments – whether there were undeclared cash sales – yes – whether there was undeclared overseas investment income or gains – yes – whether the Hansard procedure changed the usual burden and standard of proof – no – whether there had been a sufficient discovery – yes – appeals dismissed – sections 29 and 36 TMA 1970
[2009] UKFTT 275 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.409070
FTTTx PAYE – employer deducting tax at basic rate – liability of employee to under-payments of tax – Income Tax (Employments) Regulations 1993
[2009] UKFTT 320 (TC), [2010] STI 381
Income Tax (Employments) Regulations 1993
Updated: 17 August 2022; Ref: scu.409100
FTTTx Tax avoidance – Income Tax – Discounts – Gilt strips – Computation of loss – Scheme designed to create excess of amount paid for the strip over the amount payable on transfer – Excess represented by ‘premium’ for grant by taxpayer of call option – Whether option price to be added back in determining amount payable on the taxpayer’s transfer – Yes – Appeal dismissed – Para 14A Sch 13 FA 1996
[2009] UKFTT 386 (TC)
Updated: 17 August 2022; Ref: scu.409134
ENTERPRISE Investments Scheme – Eligibility for relief – Individuals qualifying for relief – Whether individual connected with issuing company – Whether individual possessed more than 30% of the loan capital and issued share capital of the issuing company – No – Appeal allowed – ICTA 1988 s.291B
[2009] UKFTT 336 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.409129
FTTTx GROSS PAYMENT STATUS – Compliance test – Cancellation – Carpentry Business hit by drop in orders -Insufficient cash to pay tax liabilities on due dates – Whether reasonable excuse – Yes – Appeal allowed – Finance Act 2004 Schedule 11 para 4 (4).
[2009] UKFTT 288 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.409008
Construction industry scheme – CIS – penalties for failure to make online returns on time – reasonable excuse – s 118(2) TMA
[2009] UKFTT 289 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.409006
INCOME TAX – Schedule E – benefits in kind – employee shareholdings – disposal of shares by employee to employer for a consideration which exceeded market value – whether shares acquired in pursuance of a right or opportunity available to employee by reason of his employment – no – whether on the disposal of the shares the payment of a consideration which exceeded market value constituted the provision of a benefit provided by reason of his employment – yes – appeal dismissed – ICTA 1988 Ss 162(1)(b), 162(6)(b) and 154
[2009] UKFTT 210 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.409036
FTTTx DOUBLE TAXATION RELIEF – individual investor in Delaware LLC – whether entitled to the profits as they arise – yes – accordingly the Appellant is entitled to credit for US tax paid by him, the LLC being transparent for US tax purposes – if wrong, the LLC is not treated as transparent by s 739 on the basis that s 741 is satisfied – if wrong HMRC were entitled to make discovery assessments
[2010] UKFTT 88 (TC), 12 ITL Rep 658, [2010] SFTD 553
England and Wales
At FTTTx – HMRC v George Anson UTTC 3-Aug-2011
UTTC Income tax – double taxation – United Kingdom and United States – whether computation by reference to the same income or profits – whether taxpayer entitled to profits as they arise . .
At FTTTx – HMRC v Anson UTTC 16-Feb-2012
UTTC Income tax – whether taxpayer can invoke section 739 of the Income and Corporation Taxes Act 1988 as against HMRC – effect of sections 739-741 – can costs be awarded in the Upper Tribunal on an appeal from . .
At FTTTx – Revenue and Customs v Anson CA 12-Feb-2013
The revenue sought to levy income tax on the taxpayers share of revenue in a Delaware Limited liability company. In the US the company would itself be liable for and pay all tax on the members’ profits. Mr Anson was resident but not domiciled in the . .
At FTTTx – Anson v Revenue and Customs SC 1-Jul-2015
Interpretation of Double Taxation Agreements
This appeal is concerned with the interpretation and application of a double taxation agreement between the United Kingdom and the United States of America. A had been a member of an LLP in Delaware, and he was resident within the UK, but not . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 August 2022; Ref: scu.408937
FTTTx Income tax – residence – determination of ordinary residence – whether taxpayer ordinarily resident for the first three full tax years after arrival in the UK – on facts, yes – appeal dismissed
[2010] UKFTT 53 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.408938
FTTTX Income tax – Sch D – computation of profits – section 42 FA 1998 – generally accepted accounting practice – whether accounts prepared in accordance with accounting standards
Income tax-section 29 TMA 1970 – discovery – whether negligent conduct if accounts not prepared in accordance with generally accepted accounting practice
[2010} UKFTT 92 (TC)
England and Wales
Updated: 17 August 2022; Ref: scu.408934