SCIT PENALTY NOTICE – failure to comply with General Commissioners’ direction-no reason for non compliance shown – appeal dismissed
CLOSURE NOTICE – eleven-fold increase in profits in amended return – failure to produce business records reasonably required by HMRC to check return-refusal of closure notice shown to be reasonable in all the circumstances
Adrian Shipwright
[2007] UKSPC SPC00577
Updated: 10 July 2022; Ref: scu.249648
SCIT Employment income – car fuel for private use reimbursed to the employer retrospectively – whether taxable because not paid in the relevant year (s 158(6) Taxes Act 1988 and s 151 ITEPA 2003) – yes – appeal dismissed
[2006] UKSPC SPC00562
Updated: 10 July 2022; Ref: scu.249660
ECJ (Freedom Of Establishment) Tax legislation – Income tax – Article 48 EEC (subsequently Article 48 EC, now, after amendment, Article 39 EC) – National rules restricting recognition of rental income losses from immovable property situated in another Member State.
C-152/03, [2005] EUECJ C-152/03
European
Updated: 10 July 2022; Ref: scu.238847
Income Tax/Corporation Tax : – whether earnings of a diver within s15 ITTOIA 2005 can be regarded as earnings of a partnership – no – whether the diver was self-employed – no – appeal dismissed
[2019] UKFTT 389 (TC)
England and Wales
Updated: 10 July 2022; Ref: scu.639125
PENALTIES – income tax – late filing of returns and late payment of tax – appeal out of time – some years admitted late – appeal allowed in part on basis of special circumstances and proportionality
[2018] UKFTT 471 (TC)
England and Wales
Updated: 10 July 2022; Ref: scu.632249
FTTTx INCOME TAX – Use of company assets by directors – whether ‘benefit’ under s 201 Income Tax (Earnings and Pensions) Act 2003 – If so whether entitlement to deduction under s 365 Income Tax (Earnings and Pensions) Act 2003 – Whether ‘discovery’ within s 29 Taxes Management Act 1970 – Appeal allowed in part
John Brooks J
[2014] UKFTT 643 (TC)
Income Tax (Earnings and Pensions) Act 2003 201, Taxes Management Act 1970 29
England and Wales
Updated: 09 July 2022; Ref: scu.533719
FTTTx INCOME TAX – Relief for gifts of shares to charity – whether arrangement designed to enhance relief or create artificial tax losses – market value of shares on initial listing – whether company’s main asset acquired shortly before listing at a reduced price – if so, impact on value of listed shares – relevance of market transactions on first day of listing – basis of valuation to be adopted – determination of market value – appeal allowed and disallowance of relief on claim re-determined
[2014] UKFTT 396 (TC)
England and Wales
Updated: 09 July 2022; Ref: scu.525343
The court was asked whether termination payments made to employees on redundancy and which had been calculated according to unexpired notice periods were liable to Schedule E income tax and national insurance. The calculations were based upon a memorandum of agreement between the company and the trades union.
Held: The memorandum could not sensibly be thought to abrogate an employee’s rights. Employees were entitled by their contracts and the memorandum to receive payments in lieu of notice. The payments made were as debts due under the contracts, and were emoluments. The taxpayers’ appeal was dismissed.
Lightman J
[2007] EWHC 270 (Ch)
Income and Corporation Taxes Act 1988 19
England and Wales
Updated: 09 July 2022; Ref: scu.248997
Burton J
[2007] EWHC 167 (Admin)
England and Wales
Updated: 09 July 2022; Ref: scu.248932
The House was asked whether interest upon two Post Office Savings Bank accounts, one in the name of the Appellant’s son Michael, and the other in the name of the Appellant’s daughter Heather, and interest upon two holdings of andpound;1,000 3 per cent. Defence Bonds, in the names of Michael and Heather respectively, ought to be treated, for all the purposes of the Income Tax Acts, as the income of the Appellant.
Normand, Oaksey, Morton, Reid, Cohen LL
[1953] AC 543, [1953] UKHL 2, [1953] 1 All ER 1102
England and Wales
Updated: 09 July 2022; Ref: scu.248517
A company had devised two elaborate schemes with a view to avoiding income tax. Lord Wilberforce discussed the definition of ‘trade’: ‘`Trade’ cannot be precisely defined, but certain characteristics can be identified which trade normally has. Equally some indicia can be found which prevent a profit from being regarded as the profit of a trade. Sometimes the question whether an activity is to be found to be a trade becomes a matter of degree, of frequency, of organisation, even of intention, and in such cases it is for the fact-finding body to decide on the evidence whether a line is passed.’
Lord Simon of Glaisdale said that between the two extremes there lies a ‘no-man’s land’ of fact and degree where it is for the commissioners to evaluate whether the activity amounts to a trade or not. The court can only interfere where the degree of fact is so inclined towards one frontier or the other as to lead it to believe that there is only one conclusion to which the commissioners could reasonably have come.’
Lord Wilberforce said that organisation is not decisive in setting status for tax purposes: ‘organisation’ as such is not a principle of taxation: ‘All depends on what you organise.’
Lord Morris of Borth-y-Gest said that: ‘it seems to me to be essential to discover and to examine what exactly it was that the person did’.
Lord Reid, Lord Wilberforce, Lord Simon of Glaisdale, Lord Morris of Borth-y-Gest, Lord Cross of Chelsea
[1974] UKHL 5, [1974] 1 WLR 1594, [1974] STC 539, [1974] TR 281, [1974] 3 All ER 949
England and Wales
Cited – Sharkey v Wernher HL 1955
Where a trader takes stock from his business for private use or for use in another business which he owns, or where he transfers to his business stock which he owns in some other capacity than that of proprietor of that business, the transfer should . .
Cited – Heydon’s Case 1584
Mischief rule of Iinterpretation
Lord Coke stated the basis of the mischief rule of interpretation: ‘For the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law), four things are to be discerned and . .
At First Instance – Ransom v Higgs 1973
. .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248608
The taxpayer was a senior employee. Involved in a traffic accident, he faced possible imprisonment if convicted. His company volunteered to pay his defence costs. The House was now asked whether the sum paid was chargeable to income tax.
Held: The appeal was hopeless. Where there is in fact a benefit and, therefore, a perquisite the Act provides that the measure of the perquisite shall be the expense incurred by the company in providing it.
Lord Reid, Viscount Radcliffe, Lord Guest, Lord Hodson, Lord Upjohn
[1964] UKHL 5, [1964] 1 WLR 650, [1964] 2 All ER 464, [1964] UKHL TC – 41 – 641
England and Wales
Updated: 09 July 2022; Ref: scu.248556
A property company asserted that it should be taxed under Schedule A in respect of the rents it received from the offices it let. The Revenue sought to charge those rents under schedule D as receipts of its trade.
Held: Income tax is only one tax, and the different Schedules do no more than to provide the method of computation charge and assessment peculiar to the Schedule to which the income is allocated.
The different schedules of the Income Tax Acts are mutually exclusive so that any exemption from tax as trading income is not automatically extended to any other head of income. The same source of income cannot be taxed twice.
Viscount Dunedin, Lord Warrington of Clyffe, Lord Atkin, Lord Tomlin, Lord Macrnillan
[1930] UKHL 1, [1930] AC 432, [1930] 15 TC 266
England and Wales
Updated: 09 July 2022; Ref: scu.248478
The parties disputed the taxpayer’s liability to income tax on income coming due to her on an American based family trust.
Held: A beneficiary in a fully administered deceased estate has an equitable interest in property which is the subject of a benefit devised or bequeathed to him or her under the will.
Lord Buckmaster, Viscount Dunedin, Lord Warrington of Clyffe, Lord Tomlin, Lord Thankerton
15 TC 693, [1930] UKHL 2, [1931] AC 212
England and Wales
See Also – Baker v Archer-Shee HL 26-Jul-1927
‘The ultimate question in this Appeal turns upon the description which in income tax phraseology ought properly to be applied to the moneys paid during the two years in question by the Trust Company of New York to the order of Lady Archer-Shee, the . .
Cited – 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 . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248479
The taxpayer was managing director of a company. The Revenue sought to tax him on two sums of andpound;20,000 paid by to him by the company. The sums were paid in part as the price of compounding a pension, and in part in consideration of the reduction of the Appellant’s annual salary.
Held: A pension is not an emolument, and a lump sum paid to commute a pension is in the nature of a capital payment which is substituted for a series of recurrent and periodic sums which partake of the nature of income, but the same view should not be taken of an arrangement made between an employer and his servant under which, instead of the whole or part of a periodic salary, a single amount is paid and received in respect of the employment.
Lord Chancellor, Lord Atkin, Lord Thankerton Lord Russell of Killowen Lord Porter
[1943] UKHL 1, (1945) 25 TC 136
England and Wales
Cited – Barclays Bank Plc and Another v HM Revenue and Customs CA 11-May-2007
Retired bank employees had previously received free tax advice. When the service was withdrawn, the bank made a payment. The Revenue said that this payment was chargeable to income tax.
Held: The bank’s appeal failed. The payment was made ‘in . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248501
Appeal against refusal of Construction Industry Scheme Certificate.
[2007] EWHC 73 (Ch)
Income and Corporation Taxes Act 1988 561
England and Wales
Updated: 09 July 2022; Ref: scu.248325
Legislation was introduced changing the taxation of one man companies through which many professional contractors worked. The asserted that this infringed their human rights by depriving them of property rights in the companies, and was an infringement of the right of freedom of movement within member states. Neither argument succeeded. There was no deprivation of property rights, and there was no discriminatory treatment according to a worker’s nationality.
Times 05-Apr-2001, Gazette 17-May-2001, [2001] EWHC Admin 236
Welfare Reform and Pensions Act 1999 75 76, Finance Act 2000 60, Social Security Contributions (Intermediaries) Regulations 2000 (2000 No 272)
England and Wales
Appealed to – Professional Contractors’ Group and Others v Commissioners of Inland Revenue CA 21-Dec-2001
Legislation had been enacted to tax under Schedule E, people employed through one man service companies and similar. Representatives of such taxpayers sought review of the legislation as incompatible with European law being a hindrance to the . .
Appeal from – Professional Contractors’ Group and Others v Commissioners of Inland Revenue CA 21-Dec-2001
Legislation had been enacted to tax under Schedule E, people employed through one man service companies and similar. Representatives of such taxpayers sought review of the legislation as incompatible with European law being a hindrance to the . .
Lists of cited by and citing cases may be incomplete.
Updated: 08 July 2022; Ref: scu.135323
Procedure – Income Tax – Application for Permission To Give Late Notice of Appeals To HMRC – permission unnecessary as HMRC had already accepted late notice – whether permission required for late notice of appeal to Tribunal – permission not required as no statutory time limit if no review offered by HMRC – appeal against penalties should proceed
[2019] UKFTT 368 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.638540
Income Tax/Corporation Tax : Penalty – Schedule 55 Finance Act 2009 – fixed and daily penalties for failure to file self-assessment returns on time – fixed penalties for late payment of tax – employer had inadvertently used incorrect PAYE code which generated an under collection of income tax – Appellant unaware that he was obliged to file a self-assessment return – whether reasonable excuse – yes – appeal allowed
[2019] UKFTT 360 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.638535
Income Tax : Discovery Assessment – deliberate conduct admitted in Contractual Disclosure Facility – whether taxpayer can resile – penalties
[2019] UKFTT 369 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.638537
INCOME TAX – penalty for failure to make returns – reliance on accountant – whether reasonable excuse – no
[2018] UKFTT 476 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.632235
INCOME TAX – penalties for failing to file self-assessment returns in order to claim relief for expenses exceeding pounds 2,500 – whether the penalties under paragraphs 5 and 6 of Schedule 55 Finance Act 2009 in respect of one of the tax years of assessment were properly determined in the light of paragraph 17(3) of that schedule – yes – whether the penalty notices were received by the Appellant and complied with the requirements of Schedule 55 Finance Act 2009 – yes, with one exception – whether the Respondents exceeded their powers in requiring the returns to be filed – no – whether the fact that the Appellant was due to receive a repayment of tax following submission of the returns amounted to ‘special circumstances’ – no – whether the Appellant had a reasonable excuse for his failure – no – appeal upheld in part
[2018] UKFTT 521 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.632234
INCOME TAX – Penalties for failure to make self-assessment returns -Generic evidence – HMRC’s failure to prove compliance with requirements of Schedule 55 Para 4(1)(c) – Daily penalties for two years quashed – Whether a reasonable excuse for the other penalties? – No – Whether special circumstances? – No – Appeal allowed in part
[2018] UKFTT 435 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.632243
INCOME TAX- late appeal permission applications – appeals against penalties for failure to pay tax on time under Schedule 56 FA 2009 – no reasonable excuse for lateness of appeals or failure to pay tax – permission refused – appeals dismissed.
[2018] UKFTT 438 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.632229
INCOME TAX – repayment of tax treated as paid by charitable company on gift aid payments – whether donations qualifying: in part no – whether assessments to recover over-repaid tax valid: no – whether s 114 TMA 1970 applies: no – whether penalty assessments valid: no – whether behaviour careless: no – appeals allowed.
[2018] UKFTT 516 (TC), [2019] SFTD 129
England and Wales
Updated: 08 July 2022; Ref: scu.632237
INCOME TAX – penalty for failure to make returns timeously – Section 8 TMA – return not issued to establish chargeability – notice to file not valid – no obligation to file – penalties not properly imposed – appeal allowed
[2018] UKFTT 523 (TC)
England and Wales
Updated: 08 July 2022; Ref: scu.632251
The appellants challenged an assessment to income tax, saying that they had not been supported by a bona fide discovery of any loss of tax, and was otherwise unsupported by evidence.
Held: ‘The appellants have over a period of many years denied the true facts and have failed to provide any evidence of their partnership income. ‘ The commissioners had applied the correct tests. Any such assessment must include an element of guesswork.
David Richards J
[2007] EWHC 1400 (Ch)
Taxes Management Act 1970 29((1)
England and Wales
Cited – Regina v Commissioner of Taxes, ex parte Hooper QBD 1915
The court considered what it was for the Revenue to ‘discover’. It accepted previous judicial statements that ‘discover’ means ‘comes to the conclusion from the examination it makes and from any information it may choose to receive’ or ‘has reason . .
Cited – Trautwein v Federal Commissioner of Taxation 9-Sep-1936
(High Court of Australia) Latham CJ considered how the Inland Revenue might make an assessment of a taxpayer’s income and said: ‘In the absence of some record in the mind or in the books of the taxpayer, it would often be quite impossible to make a . .
Cited – Bi-Flex Caribbean Ltd v Board of Inland Revenue PC 1990
The general burden falls upon a tax payer to provide the information to allow a tax assessment to be made: ‘The element of guess-work and the almost unavoidable inaccuracy in a properly made best of judgment assessment, as the cases have . .
Lists of cited by and citing cases may be incomplete.
Updated: 08 July 2022; Ref: scu.253580
Pumfrey J
[2006] EWHC 2820 (Ch)
England and Wales
Updated: 08 July 2022; Ref: scu.245994
[2006] EWHC 2491 (Ch)
England and Wales
Updated: 08 July 2022; Ref: scu.245415
SCIT NOTICE FOR PRODUCTION – whether the Respondents could reasonably require the provision of specified documents and information for the purposes of determining whether the returns were inaccurate or incomplete – the documents required included the private accounts of the Appellant which had been used to bank rental payments and the proceeds of share transactions – significant gaps in the Appellant’s tax returns despite the additional information discovered by the Respondents and confirmed by the Appellants – satisfied that the Inspector reasonably required the specified documents to complete the enquiries into Appellant’s tax returns – the requirement was limited to two years set of accounts – the requirement did not contravene Article 8 of the Human Rights Convention – Appeal Dismissed – TMA 1970 s 19A.
[2006] UKSPC SPC00554
England and Wales
Updated: 07 July 2022; Ref: scu.244607
SCIT PROCEDURE – Lead case – Application to be removed from proceedings – Appellant subject to direction binding it to outcome of lead case proceedings – Appellant applies under rule 7A(4) to be released from direction – Whether Appellant should be excluded from the case proceedings – No – Special Commissioners (Jurisdiction and Procedure) Regs, 1994/1811, r.7A.
[2006] UKSPC SPC00556
Updated: 07 July 2022; Ref: scu.244609
Income Tax, Schedule D – Profits Tax – Capital allowances – Industrial building or structure – Building for screening and packing coal – Whether coal subjected to a process – Whether building used for purpose ancillary to a retail shop – Income Tax Act, 1952 (15 and 16 Geo. VI and 1 Eliz. II, c. 10), Section 271.
A co-operative society carried on business as general merchants. Its objects included manufacturing of all kinds. A substantial part of its business was the sale of coal in 1cwt bags and in bulk, distributed by lorry from the society’s coal yard or depot. It also sold coal in 28lb paper bags through its shops as part of its retail business and to other co-operative societies as a wholesaler. It erected a building at its coal depot specifically to house the machinery used to pre-pack the coal in the paper bags. The issue was whether this was an industrial building or structure within the meaning of section 271 of the 1952 Act. The General Commissioners had found that the separation of the coal and the filling of the bags was not a process within the meaning of section 271(1)(c).
Held: The bulk coal delivered to the building was subjected to a process within the meaning of section 271(1)(c) and the building was used for part of the society’s trade so as to come within section 271(2). The pre-packing operation (which was not carried on elsewhere) was held to be a separate part of the society’s trade on the basis that it was a separate commercial activity in its own right.
Lord Guthrie said: ‘But in my opinion the separation of the dross from the coal is its subjection to a process, the process of selection from the mass of coal of lumps which are suitable for packing in bags. There is no doubt that at the building the Appellants carry on a trade, a business conducted with a view to profit, which consists of the subjection of the coal to this process.’
Lord Clyde: ‘The Crown further argued that in any event the building in question was not in use for a trade or part of a trade which consisted in the subjecting of the goods to a process within the meaning of Section 271(2) of the Act.
It was therefore disqualified from being an industrial building or structure, so the argument runs, within the meaning of the Sub-section. This contention by the Crown is also not specifically dealt with by the Commissioners, if it was presented to them. The argument was that if the Society’s only trade was screening and packing of coal in paper bags then the situation might have been different, but this Society operated a trade of general merchants, and only a small part of their total operations involved paper packaging of screened coal. But the relative proportions of the Society’s various activities appear to me to be quite irrelevant. The building in question houses a definitely identifiable part of their industrial operations and a quite separate activity, and that separate activity alone. This is in my view enough to satisfy the requirements of Sub-section (2).’
Lord Clyde, Lord Guthrie
(1966) 42 TC 675, [1966] ScotCS TC – 42 – 675, 1966 SLT 224
Scotland
Cited – Revenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
The Revenue sought to disallow for industrial buildings allowance sums expended on warehouse premises which were to be used to store window products imported for use in other manufacturing processes.
Held: The Revenue’s appeal succeeded. ‘The . .
Cited – Maco Door and Window Hardware (UK) Ltd v Revenue and Customs HL 30-Jul-2008
The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later . .
Cited – Iceland Foods Ltd v Berry (Valuation Officer) SC 7-Mar-2018
Air System plant excluded from Rating value
The court was asked whether the services provided by a specialised air handling system, used in connection with refrigerated merchandise in the appellant’s retail store, are ‘manufacturing operations or trade processes’ for rating purposes.
Lists of cited by and citing cases may be incomplete.
Updated: 07 July 2022; Ref: scu.244455
Income Tax : Penalty – Schedule 55 Finance Act 2009 – fixed and daily penalties for failure to file a self-assessment return on time – reliance on agent – whether taxpayer had a reasonable excuse for his default – appeal dismissed.
[2019] UKFTT 359 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.638539
Income Tax : Penalty for Late Payment – Schedule 56 of Finance Act 2009 – whether reasonable excuse – no – appeal dismissed
[2019] UKFTT 355 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.638541
Procedure : Application for Permission To Notify A Late Appeal – Martland applied – application refused
[2019] UKFTT 357 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.638530
Procedure : Application for Disclosure – application to strike out – whether Tribunal has jurisdiction – whether grounds have no reasonable prospect of success
[2019] UKFTT 358 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.638529
Income Tax – late filing penalty – out of time appeal – allowed – reasonable excuse – no appeal dismissed
[2019] UKFTT 364 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.638532
INCOME TAX – permission to make late appeals – appeals made four and a half years after the relevant assessments were made – permission refused
[2018] UKFTT 526 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.632236
Income Tax/Corporation Tax : Penalty
[2018] UKFTT 472 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.632260
INCOME TAX -Taxpayer notice under schedule 36 Finance Act 2008 -purchase of business-concerns over means of purchaser-information requested to establish purchase price and sources of funds-whether information requested reasonably required to establish the Appellant’s tax position.
[2016] UKFTT 134 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.561859
INCOME TAX – penalties for careless inaccuracies in self-assessment income tax returns – sch 24 FA 2007 – appeal against penalty and refusal to suspend – appeal dismissed
[2016] UKFTT 131 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.561860
INCOME TAX – self-assessment – discovery assessments – whether relevant conditions met – reference during enquiry window to potential assessability – held on facts that no information available then to enable HMRC officer to quantify loss of tax for relevant tax year – condition in s 29(5) TMA 1970 met – held, assessments valid – whether appellants were settlors for tax purposes in respect of non-UK trust – burden of proof – approach where appellants would have to prove a negative – held, for HMRC to show prima facie case and then for burden of proof to revert to appellants – held on facts that appellants were settlors – quantum of assessments to be adjusted – loss relief claims not within Tribunal’s jurisdiction as not finally determined by HMRC – appeals dismissed
[2016] UKFTT 133 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.561864
Income Tax -PAYE – National Insurance – best judgment – hotel space occupied by seven different companies- employees working for different companies – which entities are ’employer’ for PAYE and NI purposes – careless behaviour – penalties – held – HMRC’s allocation reasonable other than for 2005 -7 tax years- lack of trade does not prevent Appellant from being treated as an employer – carelessness accepted – penalties increased.
[2016] UKFTT 138 (TC)
England and Wales
Updated: 07 July 2022; Ref: scu.561850
SCIT SUB-CONTRACTOR’S CERTIFICATE – Revenue refusing on account of the failure to comply with two stated conditions – whether on being satisfied about those conditions the Revenue can raise the non-compliance with a third condition which is particularised on the day before the hearing – no (except when arising out of new facts put forward by the Appellant in showing compliance with the first two conditions)
PRACTICE – sub-contractor’s certificate – condition relating to compliance with obligations under Tax Acts – whether to strike out the Revenue’s investigations on the basis that the Appellant had no obligations – no
[2006] UKSPC SPC00553
England and Wales
Updated: 07 July 2022; Ref: scu.243255
SCIT CONSTRUCTION INDUSTRY CERTIFICATES – Preliminary issue being an appeal against Assessments under Regulation 14 of IT (Sub-contractors in the Construction Industry) Regs 1993 SI 1993/743 – Appeal dependent on whether Appellant’s contract for the supply of workers to it was a contract simply with one counter-party sub-contractor (which held a CIS 6 Certificate) or whether that sub-contractor was itself contracting as agent for numerous ’employing companies’ none of which held such certificates – Appeal allowed on the preliminary issue
[2006] UKSPC SPC00546
Sub-contractors in the Construction Industry) Regs 1993 14
Updated: 07 July 2022; Ref: scu.242832
[2006] UKSPC SPC00543
England and Wales
Updated: 07 July 2022; Ref: scu.242834
The tax payer company had failed to send in pay as you earn and NI returns for three years. The commissioners had found this to be only a minor failure and that the company was entitled to an exemption certificate under the construction industry scheme to allow it to pay its staff without deduction of income tax and NI. The court at first instance found in favour of the inspector.
Held: The company’s appeal failed. To be entitled to a certificate the company had to show that it had complied with its statutory duties for three years. Unless any failure was minor and technical. The facts found by the commissioners did not support such a conclusion.
Jonathan Parker LJ, Hughes LJ, Sir Peter Gibson
Times 09-Jun-2006, [2006] EWCA Civ 829
Income and Corporatin Taxes Act 1988 565
England and Wales
Cited – Edwards (Inspector of Taxes) v Bairstow HL 25-Jul-1955
The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only . .
Appeal from – Arnold (Inspector of Taxes) v G Con Ltd ChD 4-Mar-2005
The revenue appealed against an order by the general commissioners to grant to the taxpayer, a construction industry subcontractor, a fresh exemption certficate where he had been consistently late in submitting tax and NI payments of several . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 July 2022; Ref: scu.242629
Income tax, Schedule D – D eduction – Farm ing – Maintenance, etc., expenditure on farm house – Whether expenditure for domestic purposes distinct from those of the trade – Income Tax A c t 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c. 10) 55. 124, 137(6) and (d) and 526(1).
The House was asked whether expenses in repairing and maintaining a farmhouse, the House of Elrig, could be set off against income tax. The farmhouse had twenty rooms, but only one was used for the farm.
Held: The expenditure could be set off in full. The test of whether property was such as could benefit from income tax relief as an agricultural property was that of the reasonable man.
Lord Upjohn said: ‘My Lords, the Special Commissioners in the Case Stated said that they were not satisfied that the House of Elrig was ‘the farmhouse’, within the meaning of the Income Tax Act 1952, of the land occupied for the purposes of husbandry by the Korner family. In its Case before your Lordships’ House the Crown said that it shared those doubts but was prepared to make the concession, so your Lordships are not directly concerned with the question. But I think it right to say that I am no more satisfied than were the Special Commissioners that this house could properly be described as ‘the farmhouse’ within section 526. This is a matter of fact to be decided in the circumstances of each case, and I would think that to be ‘the farmhouse’ for the purposes of the section it must be judged in accordance with ordinary ideas of what is appropriate in size, content and layout, taken in conjunction with the farm buildings and the particular area of farmland being farmed and not part of a rich man’s considerable residence.’
And ‘The result of . . Schedule D was that, apart altogether from s.526, the farmer occupying a house (no doubt with his wife and children) for the purpose of his farming activities would be entitled to claim a proportion of the reasonable and necessary expenditure upon the maintenance of his house as a deduction from his assessment to tax for the purposes of Schedule D. This practice is very old, works great justice between the Crown and the subject and I trust will never be disturbed. Thus speaking generally the grocer living above his shop, the doctor who has a surgery in his house and the barrister who works in his house where he keeps or brings his law books and works on his briefs in the evenings and at weekends is allowed by the Crown a reasonable sum in respect of the necessary upkeep of his dwelling as being properly attributable to his trading or professional activities.
So that in the present case there is no doubt, and indeed it is not disputed, for I did not understand the Solicitor- General for Scotland to challenge this proposition in his reply, that, apart from s.526, the respondents are, in any event, entitled to a proportion of the expenses, and it is agreed between the parties that this proportion should be one tenth .’
Lord Upjohn
[1969] 1 All ER 679, [1969] 1 WLR 554, [1969] UKHL TC – 45 – 287, 1969 SLT 109, [1969] 1 WLR 554, 45 TC 287
Income Tax Act 1952 124(1) 137 526
England and Wales
Cited – Lloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
Cited – Lloyds TSB Bank Plc (Antrobus Deceased) v Inland Revenue (No 1) SCIT 17-Oct-2002
SCIT INHERITANCE TAX – agricultural property relief – freehold house which was owned and occupied by the deceased – agreed that it was a farmhouse – whether it was of a character appropriate to the property – yes . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 July 2022; Ref: scu.242348
Assessment of 14 preliminary issues as to assessments to income tax.
Hart J
[2002] EWHC 1488 (Ch)
England and Wales
Updated: 06 July 2022; Ref: scu.178006
Income Tax : Discovery Assessment – s 95 TMA and Schedule 24 FA 2007 – penalties – whether assessment appropriate and correct – yes – whether penalties correct – yes – appeals dismissed and penalties confirmed
[2019] UKFTT 367 (TC)
England and Wales
Updated: 06 July 2022; Ref: scu.638534
PENALTIES – fixed and daily penalties for failing to file a self-assessment return on time – whether the Respondents have established that the relevant penalty notices were delivered and complied with the requirements of Schedule 55 Finance Act 2009 – not in all cases – whether, in relation to the remaining penalties, a genuine belief that the return had been filed on time and ignorance of the existence of the penalties amounts to a reasonable excuse or special circumstances – no — appeal allowed in part
[2018] UKFTT 466 (TC)
England and Wales
Updated: 06 July 2022; Ref: scu.632227
INCOME TAX – penalty for failure to make returns-whether notice to file valid-tribunal jurisdiction – whether penalties due – reasonable excuse
[2018] UKFTT 527 (TC)
England and Wales
Updated: 06 July 2022; Ref: scu.632248
Late filing of Partnership Return – reasonable excuse?
[2010] UKFTT 308 (TC)
England and Wales
Updated: 06 July 2022; Ref: scu.422304
INCOME TAX/ CORPORATION TAX – assessment/self-assessment – repair of self-assessment tax return – whether return complete – yes: reference to liability made in box relating to ‘Additional information’ – whether amendment to return possible where enquiry opened and closed on incorrect premise – yes: return already included information to make the repair – appeal dismissed
INCOME TAX/ CORPORATION TAX – pension schemes – privatisation of Scottish Bus Group Ltd – winding up of pension schemes – nature of ‘ex gratia’ payments made by government to those previously entitled to pension benefits – whether individual taxable on ‘ex gratia’ benefit so received pursuant to ICTA 1988, s.596A(2) – yes: benefit provided under ‘retirements benefit scheme’ – appeal dismissed
[2006] UKSPC SPC00538
England and Wales
Updated: 06 July 2022; Ref: scu.241889
When drawing up accounts where the company faces contingent laibilities and provision has to be made, the principles upon which such provisions are made does not depend upon (Lord Radcliffe) ‘any exact analysis of the legal form of the relevant obligation’ but upon estimates of what in practice is likely to happen.
The House noted the difference between what is required by way of accounting standards in a financial statement so that a full picture may be presented on the financial position of the company and what is profit for the purpose of profits taxes. Lord Radcliffe said: ‘All this is very important, because, of course, accountants are very specially concerned with the problems that attend the true ascertainment of a year’s profit and the establishment of techniques that assist in this. But, for all that, there is nothing in the case that seems to me to fix on the point that is really the heart of this appeal. The requirements that an auditor may make before signing a balance sheet (I assume that the words used in the case are meant to cover the statutory reference to the profit and loss account) do, no doubt, cover his opinion that that account gives a ‘true and fair view’ of the profit for the financial year, but I do not think that such requirements are necessarily the same thing as the auditor’s opinion that some particular provision could not be omitted without compromising the true and fair view. It is not possible completely to equate the balance shown by a company’s profit and loss account with the balance of profit arising from the trade for the year.’
Lord Radcliffe
[1956] UKHL 4, [1957] AC 334, 37 Tax Cas 602, [1956] 2 All ER 728
England and Wales
Cited – Law Society v Sephton and Co (a Firm) and Others HL 10-May-2006
A firm of solicitors had a member involved in a substantial fraud. The defendant firm of accountants certified the firm’s accounts. There were later many calls upon the compensation fund operated by the claimants, who sought recovery in turn from . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 July 2022; Ref: scu.241656
The contractor sought an exemption certificate. The revenue refused it saying that he had failed to make the appropriate returns, and now appealed the General Comissioners’ decision to issue one.
Held: This was not a situation where there was any discretion. The section was rigorously prescriptive save only where a failure was ‘minor and technical’. Payments had been late for 32 out of 34 months.
Park J
Times 18-Apr-2006, [2006] EWHC 689 (Ch)
Income and Corporation Taxes Act 1988 565
England and Wales
Updated: 05 July 2022; Ref: scu.240432
SCIT Income tax – National Insurance contributions – whether named individuals were employees of a named employer or were sub-contractors employed in the construction industry – whether other named individuals are parties to those decisions
[2006] UKSPC SPC00527
Updated: 05 July 2022; Ref: scu.240293
SCIT INCOME TAX: ALLOWABLE EXPENDITURE Sch D: interest payments on a commercial mortgage- was the purpose of the mortgage to purchase just business assets or to purchase a private dwelling house as well – a question of fact – the purpose of the mortgage was to buy a parcel of assets with a mixed business and private use – the interest payments apportioned to reflect the mixed use – the appropriate rate of apportionment 35/65 private and business use based on the finding that the mortgage was to facilitate the purchase of the entire business assets plus the dwelling rather than the purchase of two properties – decision in principle to allow the Appeal in part but only in so far as substituting 35 per cent for the 50 per cent add back in respect of the interest – parties directed to agree computations in order to make final determination. Final Determination.
[2006] UKSPC SPC00531
Updated: 05 July 2022; Ref: scu.240289
NATIONAL INSURANCE CONTRIBUTIONS – section 121C Social Security Administration Act 1992 – personal liability notice – liability of director for company’s contributions – fraud or neglect on the part of a director
COSTS – Regulation 21(1), Special Commissioners (Jurisdiction and Procedure) Regulations 1994 – Appellant withdrawing two grounds of appeal shortly before hearing – Whether appellant acting wholly unreasonably in connection with hearing
[2006] UKSPC SPC00529
Special Commissioners (Jurisdiction and Procedure) Regulations 1994, Social Security Administration Act 1992 121C
Updated: 05 July 2022; Ref: scu.240291
SCIT INCOME TAX – Section 595 ICTA 1988 – Whether contribution to a FURBS taking the form of transfers of shares was a payment of a sum deemed by s.595(1) to be income assessable under Schedule E – held it was.
[2006] UKSPC SPC00526
Updated: 05 July 2022; Ref: scu.240292
[2018] EWCA Civ 2348
Capital Allowances Act 2001 439
England and Wales
Updated: 05 July 2022; Ref: scu.628678
Income Tax/Corporation Tax : Profits
[2018] UKFTT 25 (TC)
England and Wales
Updated: 04 July 2022; Ref: scu.604354
Income Tax/Corporation Tax : Appeal
[2017] UKFTT 848 (TC)
England and Wales
Updated: 04 July 2022; Ref: scu.600948
Income Tax/Corporation Tax : Penalty
[2015] UKFTT 646 (TC)
England and Wales
Updated: 04 July 2022; Ref: scu.557169
CONSTRUCTION INDUSTRY SCHEME – partnership changed to Limited Liability Partnership – LLP took on a further partner and changed its year end- appellant relied on accountant to finalise the accounts and advise amount of tax due- accountant failed to appeal removal of gross payment status – further accountants instructed for LLP – LLP suffered a substantial bad debt when MFI went into receivership – appellant alleged reasonable excuse for failure to pay income tax and penalties giving rise to non-compliance -appeal dismissed – no reasonable excuse.
[2010] UKFTT 321 (TC)
England and Wales
Updated: 04 July 2022; Ref: scu.422307
Construction Industry Scheme – penalties for late filing of return required by paragraph 4 of the Income Tax (Construction Industry Scheme) Regulations 2005 taxpayer registered for filing on line therefore no prompt by HMRC – whether a reasonable excuse under s.118(2) TMA 1970 – no
[2010] UKFTT 415 (TC)
England and Wales
Updated: 04 July 2022; Ref: scu.426544
SCIT APPLICATION TO REVIEW AND SET ASIDE A DECISION UNDER REGULATION 19 OF THE SPECIAL COMMISSIONERS (JURISDICTION AND PROCEDURE) REGULATIONS 1994 – the Appellant submissions repeat his arguments considered at the Appeal hearing on 7 October – the Appellant has put forward no grounds for setting aside the decision – Application refused.
[2005] UKSPC SPC00516
Updated: 04 July 2022; Ref: scu.237624
DIRECTION sought that unsubstantiated allegations of fact contained in the UK’s Written Observations to the European Court of Justice will have to be made good and that the matter cannot proceed on the basis of any of those allegations until made good – whether jurisdiction to make – yes, but no Direction made – the Tribunal’s understanding of the main differences between the parties over the facts summarised in case the ECJ finds it useful
[2005] UKSPC SPC00512
England and Wales
Updated: 04 July 2022; Ref: scu.237623
Husband and wife had been shareholders in a company, the wife being recorded as company secretary. The company paid dividenceds to both. The husband appealed a decision that the payment to his wife was by way of a settlement and was taxable in his hands.
Held: The appeal succeeded. ‘there can be no doubt but that the arrangement was or included the acquisition by Mrs Jones of her share in the Company. Equally there can be no doubt that that acquisition on its own was for full value in the context of a joint business venture to which both parties made substantial and valuable contributions’ The court distinguished all the earlier cases. ‘In the absence of any service agreement between the Company and Mr Jones I am unable to accept that the payment of modest salaries to Mr Jones was any part of the arrangement. Similarly the declaration of the dividends was not arranged in advance; it was dependent on the trading fortunes of the Company.’ There was no settlement as defined in this case.
Lord Justice Keene Lord Justice Carnwath The Chancellor of the High Court
[2005] EWCA Civ 1553, Times 03-Jan-2006, [2006] 1 WLR 1123
Income and Corporation Taxes Act 1988 660G(1)
England and Wales
Cited – Inland Revenue Commisioners v Leiner 1964
An interest free loan was made to an associated company from the taxpayer’s mother which was then replaced by another interest free loan from the taxpayer. The circle of loans included an interest bearing loan to the taxpayer from the trustees of a . .
Cited – Bulmer v Inland Revenue Commissioners 1967
Shareholders fearing a takeover sold their shares to another company’s subsidiary at below market value, the balance of value outstanding on an interest free loan. A commercial loan was used to buy further shares. When the loan was fully repaid the . .
Cited – Inland Revenue Commissioners v Plummer HL 1-Nov-1979
Although transactions were integrated as part of a preconceived scheme which was commercially marketed and that had no other conceivable purpose than that of saving surtax, the construction of the statute compelled the acceptance of a fiscal result . .
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 – Copeman v Coleman 1939
A company had been formed to take over the taxpayer’s business. He held the shares equally with his wife. Later the company created a class of preference shares of andpound;200 each carrying a fixed preferential dividend, the right to vote if such . .
Cited – Commissioners of Inland Revenue v Payne CA 1940
The taxpayer covenanted to pay an annual sum to a company controlled by him for his life or until it was wound up. He claimed to deduct the amount of the covenant in the computation of his total income for surtax purposes. The Revenue refused his . .
Cited – Crossland v Hawkins CA 1961
The taxpayer, a well known film actor, agreed to work through a company for three years being paid andpound;50 per week. The shares were transferred to his wife and accountant. His father in law set up a andpound;100 settlement for the benefit of . .
Cited – Mills (Hayley) v Commissioners of Inland Revenue HL 12-Feb-1974
Surtax – Settlement – Arrangement – Settlor – Fees for actress’s services paid to company but enuring for her benefit – Actress aged 14 when arrangements made – Settlement with more than one settlor – From whom income originates – Income Tax Act . .
Cited – Butler v Wildin 1988
Two brothers acquired a company and were the sole directors. 19 shares each were acquired by the children with their own money. Two later born children also acquired 19 shares therein with their own money from their respective fathers and others, . .
Cited – Butler v Wildin 1988
Two brothers acquired a company and were the sole directors. 19 shares each were acquired by the children with their own money. Two later born children also acquired 19 shares therein with their own money from their respective fathers and others, . .
Cited – Young v Pearce 1996
The company created a special class of preference shares and allotted them to the wives of the two shareholders and directors. When substantial preference dividends were paid to the wives, the husbands were assessed to tax on them. They conceded . .
Appeal from – Jones v Garnett (Inspector of Taxes) ChD 28-Apr-2005
The taxpayer worked as an information technology specialist. His earnings were channelled through a limited company. The company paid on part of its income to his wife, with the result that the total tax paid was reduced. The inspector sought to tax . .
Appeal From – Jones v Garnett (Her Majesty’s Inspector of Taxes) HL 25-Jul-2007
The husband and wife had each owned a share in a company which sold the services of the husband. The Revenue claimed that the payment of dividends to the wife was a settlement.
Held: The Revenue failed. The share had been transferred to the . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 July 2022; Ref: scu.236378
The taxpayer had been represented in proceedings throughout by tax law experts, Tenon Media, who were not legally admitted, but had a right to conduct litigation under the 1990 Act. The Inspector objected to paying costs as if the representatives were admitted.
Held: Someone acting through the licensed access schemes was not a litigant in person. However the guidance noted that under the scheme: ‘. . . any litigation will have to be conducted on the basis that the litigant is a litigant in person.’ Though he ws able to recover some disbursements, he was not able to recover the general profit costs of those he had employed.
Booke LJ, Dyson LJ, Carnwath LJ
[2005] EWCA Civ 1507, Times 22-Dec-2005
Solicitors Act 1974 20, Courts and Legal Services Act 1990 17, Litigants in Person (Costs and Expenses) Act 1975
England and Wales
Distinguished – Jonathan Alexander Ltd v Proctor CA 19-Dec-1995
A company represented in proceedings by a director is not a litigant in person, and therefore has no expenses or costs claimable from the other party.
Hirst LJ said: ‘. . the ordinary meaning, as I understand it, of the description ‘litigant . .
See Also – Agassi v Robinson (Inspector of Taxes) CA 19-Nov-2004
. .
Cited – Gregory and Gregory v Turner, Turner; Regina (Morris) v North Somerset Council CA 19-Feb-2003
The parties were involved in a boundary dispute. One granted an enduring power of attorney, and sought to appear as a litigant in person through the power.
Held: The right of a litigant in person to represent himself was a personal right, and . .
Cited – The Law Society of the United Kingdom v Waterlow Brothers and Layton HL 1883
There was a claim that there had been a breach of section 2 of the 1843 Act by law stationers (who had had various dealings with the Probate registry under the supervision of solicitors). The Rules of the Probate Court required applications for . .
Cited – In re Ainsworth, ex parte the Law Society 1905
An unqualified person who gives notice of appearance is thereby acting in contravention of section 2 of the 1843 Act. The relevant rule of court required a notice of appearance to be given either by the defendant himself or his solicitor. . .
Se Also – Agassi v Her Majesty’s Inspector of Taxes HL 17-May-2006
The tax payer played tennis and was paid sums for when he played in England. The sums were paid to his overseas based company.
Held: The revenue’s appeal succeeded. The ‘legislative intendment in relation to sections 555 and 556, and their . .
mentioned – Prudential Plc and Another, Regina (on the Application of) v Special Commissioner of Income Tax and Another Admn 14-Oct-2009
The company had obtained legal advice but had taken it from their accountants. The Revenue sought its disclosure, and the company said that as legal advice it was protected by legal professional privilege.
Held: The material was not protected. . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 July 2022; Ref: scu.235535
SCIT CAPITAL ALLOWANCES – industrial buildings allowances – building used to house goods manufactured by the Appellant’s Austrian parent company for sale to wholesalers in the UK to be used in manufacture – whether there was storage – yes – whether part of the Appellant’s trade consists in storage – yes – appeal allowed
[2005] UKSPC SPC00508, [2006] STC (SCD) 1, [2005] STI 1996
England and Wales
At SCIT – Revenue and Customs v Maco Door and Window Hardware (Uk) Ltd ChD 19-Jul-2006
The Revenue sought to disallow for industrial buildings allowance sums expended on warehouse premises which were to be used to store window products imported for use in other manufacturing processes.
Held: The Revenue’s appeal succeeded. ‘The . .
At SCIT – Maco Door and Window Hardware (UK) Ltd v HM Revenue and Customs CA 19-Jun-2007
Correct classification, for the purposes of capital allowances, of expenditure on a building provided for the business of the appellant. . .
At SCIT – Maco Door and Window Hardware (UK) Ltd v Revenue and Customs HL 30-Jul-2008
The House was asked whether a warehouse used to store purchases made by the company from its parent company in Austria, was an ‘industrial building or structure’. It was agreed that the facility was used for the storage of materials for use in later . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 July 2022; Ref: scu.235467
ECJ Judgment – Freedom to provide services – Income tax – Taxable income – Deduction of expenses for professional training courses – Distinction according to the location of the courses
R. Schintgen (Rapporteur), P
C-55/98
European
Updated: 04 July 2022; Ref: scu.231708
ASSESSMENTS – appeal dismissed and estimated assessments upheld in the taxpayer’s absence
PRACTICE – taxpayer disappeared – Direction dispensing with service of documents on the Appellant
[2005] UKSPC SPC00498
England and Wales
Updated: 04 July 2022; Ref: scu.230429
SCIT INCOME TAX – Car and Fuel Benefit – is a motorhome a car within the meaning of s168(5)(a) ICTA 1988 – yes – motorhome provided for personal use and by reason of employment – taxpayer liable to pay income tax on car and fuel benefit – Appeal dismissed.
DISCOVERY ASSESSMENT – No tax return produced in evidence – is evidence of the tax return a necessary pre-requisite for making a decision about whether the Revenue has complied with the condition of s29(5) TMA 1970 – yes unless destroyed or lost – the burden of adducing evidence of the return rests on the taxpayer- no evidence adduced – discovery assessment validly made.
NATIONAL INSURANCE CONTRIBUTION – Class 1A NIC – Company liable to pay additional Class 1A on car and fuel benefit – Appeal Dismissed.
[2005] UKSPC SPC00495
England and Wales
Updated: 04 July 2022; Ref: scu.230425
A father complained that tax deductions which were granted to married fathers but not to unmarried fathers were discriminatory. He had paid maintenance for his daughter, but was not allowed to set the payments off against his income tax in the way he would have if he and the mother had been married.
Held: There was no proper justification of the different treatment. The purpose of the allowance was to encourage fathers to support their children, and to support them in making new families. There was no reason why previously unmarried fathers should be treated worse.
6638/03, Times 15-Sep-2005, [2005] ECHR 504, (2005) 18 BHRC 668, [2009] ECHR 2255
European Convention on Human Rights A14 P1a1
Cited – McMichael v United Kingdom ECHR 2-Mar-1995
In the course of care proceedings, medical and social services’ reports were disclosed to the courts, but not to the parents involved.
Held: The courts’ failure to show reports to the parents in care proceedings was a breach of the Convention. . .
Cited – James and Others v The United Kingdom ECHR 21-Feb-1986
The claimants challenged the 1967 Act, saying that it deprived them of their property rights when lessees were given the power to purchase the freehold reversion.
Held: Article 1 (P1-1) in substance guarantees the right of property. Allowing a . .
Cited – In re P and Others, (Adoption: Unmarried couple) (Northern Ireland); In re G HL 18-Jun-2008
The applicants complained that as an unmarried couple they had been excluded from consideration as adopters.
Held: Northern Ireland legislation had not moved in the same way as it had for other jurisdictions within the UK. The greater . .
Cited – Rodriguez v Minister of Housing of The Government and Another PC 14-Dec-2009
Gibraltar – The claimant challenged a public housing allocation policy which gave preference to married couples and parents of children, excluding same sex and infertile couples.
Held: The aim of discouraging homosexual relationships is . .
Lists of cited by and citing cases may be incomplete.
Updated: 03 July 2022; Ref: scu.229820
This case concerns the validity of follower and accelerated payment notices which the respondents, HM Revenue and Customs gave to the appellant. Sir Ross Cranston dismissed a claim for judicial review of the notices, but Mr H appeals against that decision.
[2019] EWCA Civ 747
England and Wales
Updated: 03 July 2022; Ref: scu.636708
SCIT SCHEDULE A – income from land – whether agreements for lease gave rise to an immediate right to rent or whether the right was conditional on obtaining the landlord’s consent to subletting – whether the Landlord and Tenant (Covenants) Act 1995 enables retention of a future rent payment on a sale of the reversion – no – whether the definition of the retained rent payment is void for uncertainty – no – whether contractual right to such rent is within Schedule A – no
CASE VI OF SCHEDULE D – profits – as to the rent payable under agreements entered into before the 1995 Act, it is not taxable under Case VI because the only possible head of charge is Schedule A which does not apply because the source has ceased – as to the rent caught by the 1995 Act which passed automatically to the purchaser, the sum equal to the rent purported to be retained on sale that the purchaser was liable to pay to give business effect to the agreement is taxable under Case VI
[2004] UK SPC00433
Landlord and Tenant (Covenants) Act 1995
England and Wales
Cited – Javad v Aqil CA 15-May-1990
P in possession – tenancy at will Until Completion
A prospective tenant was allowed into possession and then made periodic payments of rent while negotiations proceeded on the terms of a lease to be granted to him. The negotiations broke down.
Held: The tenant’s appeal failed. It was inferred . .
Cited – Wembley National Stadium Ltd v Wembley (London) Ltd and Others ChD 4-Apr-2007
Land at Wembley stadium had been sold to the defendants and leased back. The defendant assigned the freehold within the group, declaring that the lease was held in trust for the original freeholder. The claimant now said that the defendant assignee . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 July 2022; Ref: scu.228783
SCIT DOUBLE TAXATION AGREEMENT – non-discrimination – whether UK permanent establishment of Swiss company entitled to payment of the tax credit on dividends under s 243 Taxes Act 1988 – yes, on the interpretation of the treaty – whether treaty incorporated into UK law by s 788 to give effect to the payment – no
[2005] UKSPC SPC00480, [2005] STC (SCD) 589
Appeal from – UBS Ag v HM Revenue and Customs ChD 7-Feb-2006
The bank, based in Switzerland sought tax credits for the activities of its London branch.
Held: Although the argument under s243 directly failed, the claim under section 788(3) had to succeed. The Swiss company was entitled to the same tax . .
At SCIT – HM Revenue and Customs v UBS Ag CA 21-Feb-2007
The court considered the treatment of losses in a London branch of the non-resident Bank. Had the company been resident it could have set off the losses. It claimed that the refusal was an unlawful discrimination. . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 July 2022; Ref: scu.228330
Revenue – Income Tax – 5 and 6 Vict. c. 35, secs. 60 and 100, Schedule D
Held ( aff. judgment of Court of Session) that in determining the amount of profit for any year upon which a mine-owner is to be assessed, he is not entitled to write off and deduct from the gross earnings of his mine a sum to represent the amount of capital expended on making bores and new pits that has been exhausted during the year.
Earl Cairns, Lord Penzance, and Lord Blackburn
[1881] UKHL 466 – 1, 18 SLR 466 – 1
Scotland
Updated: 30 June 2022; Ref: scu.636793
[1890] UKHL TC – 3 – 117, 15 App Cas 334
England and Wales
Updated: 30 June 2022; Ref: scu.636737
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 the combined payments carried forward. Though this might be unfair, this was the natural and ordinary meaning of the legislation, and any reform was for legislators.
Mummery LJ, Arden LJ, Munby J
[2005] EWCA Civ 709, Times 07-Jul-2005
Income and Corporation Taxes Act 1988 655(1)
England and Wales
Appeal from – Lonsdale v Braisby (HMIT) ChD 23-Jul-2004
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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 30 June 2022; Ref: scu.226731
SCIT Costs – Special Commissioners power to award costs – whether Inland Revenue had acted wholly unreasonably in connection with the hearing. No – Special Commissioners (Jurisdiction and Procedure) Regulations 1994, SF 1994/1811, Reg. 21 – Application disallowed.
[2004] UKSPC SPC00472
England and Wales
Updated: 30 June 2022; Ref: scu.224960
SCIT ASSESSMENT – whether loss of tax on account of negligence – yes – whether taxpayer has satisfied burden of disproving the assessment – adjourned to allow the Inspector to comment on the taxpayer’s contentions – penalty issued for non-compliance with directions
[2005] UKSPC SPC00469
Updated: 30 June 2022; Ref: scu.224961
SCIT CORPORATION TAX – Appellant issued funding bonds to foreign subsidiary companies – whether the effect of section 582 of the Income and Corporation Taxes Act 1988 was to treat the funding bonds as interest and therefore as income with the result that the foreign exchange legislation in the Finance Act 1993 did not apply to tax the exchange gains made on the funding bonds – no – appeal dismissed – ICTA 1988 section 582; FA 1993 Ss 125 to 170
[2005] UKSPC SPC00466
Income and Corporation Taxes Act 1988 582, Finance Act 1993 125
Updated: 30 June 2022; Ref: scu.224954
The UK parent company owned subsidiaries incorporated in East Africa and carried on trading activities there. The managing director of the parent company concluded that ‘the situation of the African subsidiaries was becoming so serious that it was unwise to allow them to be managed in Africa any longer, and that their management must be taken over by the directors of [the parent company] in London.’ The board of directors of the parent company ‘decided that . . they were forced to take over management and control’, and the representative of the parent company in East Africa took over the functions of the local boards, which still existed but stood aside, and controlled the subsidiaries in accordance with the requirements of the parent. Much of that may have been irregular, or even unconstitutional, but it was what happened.
Held: The African subsidiaries had become resident in the United Kingdom. A company can come to be resident in a territory even if it does not hold directors’ meetings there.
[1960] AC 455, [1959] UKHL TC – 38 – 712
England and Wales
Cited – New Zealand Forest Products Finance NV v Commissioner of Inland Revenue 1995
(New Zealand) The taxpayer company was established in the Netherlands Antilles as the subsidiary of a New Zealand parent company. It was a vehicle company whose purpose was to raise borrowings on the Eurobond market and to lend the money on to the . .
Cited – Untelrab Ltd v McGregor 1996
(Inland revenue Comissioners) A Jersey company was established as a wholly owned subsidiary of a UK-based group. The directors met in Bermuda, not in Jersey. Its function was to hold surplus group funds, to invest them for the time being, and to . .
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 . .
Applied – Esquire Nominees Ltd v Commissioner of Taxation 1971
(High Court of Australia) The company had directors who lived on Norfolk Island, but also had close connections with an Australian firm of accountants (WBBC), which evolved and implemented a tax scheme for an Australian family. The company acted as . .
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 . .
Lists of cited by and citing cases may be incomplete.
Updated: 30 June 2022; Ref: scu.224773
The section gave the Commissioners a discretion as to whether to certify an otherwise complying policy of life assurance under the Act, so as to allow tax relief on premiums. No mandatory duty to approve policies was set out.
Lord Justice Pill, Lord Justice Robert Walker and Mr Justice Laddie
Times 26-Nov-2001, [2001] EWCA Civ 1681, [2001] BTC 467, 74 TC 346, [2001] STI 1421, [2001] STC 1639
Income and Corporation Taxes Act 1988
England and Wales
Updated: 29 June 2022; Ref: scu.166858
Income Tax/Corporation Tax : Appeal
[2017] UKFTT 610 (TC)
England and Wales
Updated: 29 June 2022; Ref: scu.592638
Income Tax: Construction Industry Scheme – appeal against removal of gross payment status – no reasonable excuse – Appeal dismissed.
[2010] UKFTT 391 (TC)
England and Wales
Updated: 29 June 2022; Ref: scu.426550
The taxpayer worked as an information technology specialist. His earnings were channelled through a limited company. The company paid on part of its income to his wife, with the result that the total tax paid was reduced. The inspector sought to tax the sum paid to the taxpayer’s wife as a settlement made on her by the husband. The taxpayer appealed.
Held: His appeal failed. The term ‘settlement’ was to be interpreted widely. It was critical to the Revenue’s case to establish that what occurred was an ‘arrangement’. Within the authorities cited it counted as such. If there was an arrangement and a setlement, the tax payer was the settlor, and was taxable. The taxpayer worked within the company for far less than his true earning power. This case need not have very wide ranging conclusions.
Park J
Times 17-May-2005, [2005] STC 1667
Income and Corporation Taxes Act 1988 660A(I) 660G(I)
England and Wales
Cited – Crossland v Hawkins CA 1961
The taxpayer, a well known film actor, agreed to work through a company for three years being paid andpound;50 per week. The shares were transferred to his wife and accountant. His father in law set up a andpound;100 settlement for the benefit of . .
Cited – Copeman v Coleman 1939
A company had been formed to take over the taxpayer’s business. He held the shares equally with his wife. Later the company created a class of preference shares of andpound;200 each carrying a fixed preferential dividend, the right to vote if such . .
Cited – Young v Pearce 1996
The company created a special class of preference shares and allotted them to the wives of the two shareholders and directors. When substantial preference dividends were paid to the wives, the husbands were assessed to tax on them. They conceded . .
Cited – Butler v Wildin 1988
Two brothers acquired a company and were the sole directors. 19 shares each were acquired by the children with their own money. Two later born children also acquired 19 shares therein with their own money from their respective fathers and others, . .
Cited – Inland Revenue Commisioners v Leiner 1964
An interest free loan was made to an associated company from the taxpayer’s mother which was then replaced by another interest free loan from the taxpayer. The circle of loans included an interest bearing loan to the taxpayer from the trustees of a . .
Cited – Mills (Hayley) v Commissioners of Inland Revenue HL 12-Feb-1974
Surtax – Settlement – Arrangement – Settlor – Fees for actress’s services paid to company but enuring for her benefit – Actress aged 14 when arrangements made – Settlement with more than one settlor – From whom income originates – Income Tax Act . .
Cited – Bulmer v Inland Revenue Commissioners 1967
Shareholders fearing a takeover sold their shares to another company’s subsidiary at below market value, the balance of value outstanding on an interest free loan. A commercial loan was used to buy further shares. When the loan was fully repaid the . .
Appeal from – Jones v Michael Vincent Garnett (HM Inspector of Taxes) CA 15-Dec-2005
Husband and wife had been shareholders in a company, the wife being recorded as company secretary. The company paid dividenceds to both. The husband appealed a decision that the payment to his wife was by way of a settlement and was taxable in his . .
At First Instance – Jones v Garnett (Her Majesty’s Inspector of Taxes) HL 25-Jul-2007
The husband and wife had each owned a share in a company which sold the services of the husband. The Revenue claimed that the payment of dividends to the wife was a settlement.
Held: The Revenue failed. The share had been transferred to the . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.224920
SCIT Inland Revenue – officer of the Board – persons within definition – power to transfer functions to another officer
Income tax – self assessment – scope of enquiry under TMA 1970 s 9A – nature of return under TMA 1970 s 8
Special Commissioners – withdrawal of certain grounds of appeal – costs – whether wholly unreasonable
[2004] UKSPC SPC00456
Updated: 29 June 2022; Ref: scu.222570
SCIT ENTERPRISE INVESTMENT SCHEME – whether money raised by share issues was for the purpose of a qualifying business activity or partly for the activities of foreign subsidiaries – whether money employed wholly for the qualifying business activity – appeal allowed
[2005] UKSPC SPC00455
England and Wales
Updated: 29 June 2022; Ref: scu.221964