Category: Income Tax

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 anonymisation of the judgment – the extent to which the identity of the parties has already been revealed goes to the questions of what rights to privacy they still have and how effective the order is likely to be in preserving them.

Henderson J
[2009] EWHC 62 (Ch), [2009] STC 1930, [2009] 3 All ER 915, [2010] 1 WLR 800, [2009] STI 1962, [2009] BTC 323
Bailii
Income and Corporation Taxes Act 1988 198
England and Wales
Cited by:
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, . .
Appeal from – HM Revenue and Customs v Banerjee CA 28-Jul-2010
The taxpayer doctor had claimed against her income tax, the costs of attending training courses required under her employment contract and for professional development. The Revenue appealed against a decision allowing the expenses.
Held: The . .
Cited – Money v AB ChD 10-Nov-2021
Anonymity – balance in favour of open justice
Ruling on an application by the Defendant for anonymity.
Held: Refused: ‘The mental health condition of the Defendant and the impact of the judgment on his family relationships are, therefore, relevant factors to take into account, but they do . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 17 November 2021; Ref: scu.347122

Inland Revenue v Broadway Cottages: CA 26 Jul 1954

Two charitable trusts appealed against decisions disallowing their claim to allowance for relief against income tax of certain incomes.
Held: To be valid, a trust must be one which the Court can control and execute. In this case, the discretion given to the trutees was absolute, and nor was the class of beneficiaries ascertainable.

Singleton, Jenkins, Hodson LJJ
[1954] EWCA Civ 4, [1955] Ch 20, (1954) 33 ATC 305, [1954] 3 All ER 120, [1954] TR 295, [1954] 3 WLR 438
Bailii
Income Tax Act 1918 37(1)(b)
England and Wales
Citing:
Cited – Morice v Bishop of Durham HL 1805
The court was asked whether a gift of residue to be applied ‘to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of’ was valid as being confined to purposes that were charitable.
Held: . .
Cited – In re Gestetner ChD 1953
The court considered a discretionary distribution power given to trustees.
Held: Harman J said that the trustees were bound ‘to consider at all times during which the trust is to continue whether or no to distribute any and if so what part of . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Charity

Updated: 16 November 2021; Ref: scu.262848

Jones v Revenue and Customs: FTTTx 16 Apr 2012

INCOME TAX – Mobile motor technician – Provided with specially modified vehicle by employer – Whether a goods vehicle – No – Appeal dismissed – s 115 Income Tax (Earnings and Pensions) Act 2003

[2012] UKFTT 265 (TC)
Bailii
England and Wales

Income Tax

Updated: 16 November 2021; Ref: scu.462688

Base Brickwork (A Firm) v Revenue and Customs: FTTTx 22 Aug 2012

Construction Industry Scheme – cancellation of gross payment registration – breaches of compliance test – whether reasonable excuse under para 8(3) sch 11 FA 2004 – whether forgiveness under reg 32 Income Tax (Construction Industry Scheme) Regulations 2005 (SI 2005/2045) – appeal dismissed

[2012] UKFTT 536 (TC)
Bailii
England and Wales

Income Tax, Construction

Updated: 15 November 2021; Ref: scu.466069

Expion Silverstone Ltd v Revenue and Customs: FTTTx 22 Jun 2018

Income Tax/Corporation Tax : Penalty – EMPLOYMENT INTERMEDIARIES RETURNS – penalties for failing to file returns for three periods – no evidence that an authorised officer of the Board made a determination under section 100 TMA 1970 – HMRC policy seemingly inconsistent with the law – appeal allowed

[2018] UKFTT 460 (TC)
Bailii
England and Wales

Income Tax

Updated: 15 November 2021; Ref: scu.622361

The Vaccine Research Limited Partnership and Another v Revenue and Customs: UTTC 2 Sep 2014

Capital allowances – expenditure on research and development – whether partnership trading – quantum of expenditure incurred on research and development – whether trade conducted on a commercial basis – location of partnership’s trade – income tax relief for interest incurred on borrowings to fund partnership capital – deductibility of fee incurred by partnership in consideration for services – whether wholly and ordinarily incurred for the purpose of the partnership’s trade

[2014] UKUT 389 (TCC), [2015] STC 179, [2014] BTC 525
Bailii
England and Wales

Income Tax

Updated: 15 November 2021; Ref: scu.537628

Brady v Revenue and Customs: FTTTx 24 Jun 2011

Income tax – underpayment of PAYE over four years – self-assessment returns issued – surcharges for late payment of tax – whether reasonable excuse throughout the period of default – what is the period of default – whether reasonable to believe that tax was being correctly deducted – yes- whether taxpayer reasonably believed HMRC had agreed a time to pay arrangement – yes – surcharges set aside and appeal allowed.

[2011] UKFTT 415 (TC)
Bailii
England and Wales

Income Tax

Updated: 14 November 2021; Ref: scu.443086

Bell v Revenue and Customs: FTTTx 22 Aug 2012

PROCEDURE -applications for permission to appeal various income tax and VAT decisions out of time -appellant’s explanation for delay considered- HMRC’s conduct in asking for further information and in reducing tax demanded in context of collection proceedings did not constitute a good explanation for delay – applications dismissed

[2012] UKFTT 534 (TC)
Bailii
England and Wales

Income Tax, VAT

Updated: 12 November 2021; Ref: scu.466070

Macey v Revenue and Customs: FTTTx 2 Nov 2010

INCOME TAX – Whether an one-off award of restricted stock units was an inducement to enter into a contract of employment and to perform services in the future or compensation for the loss of an asset unconnected with employment – the one-off award was an inducement to enter into a contract of employment – the one-off award on conversion to common stock was chargeable to income tax as earnings within the meaning of section 62(2) ITEPA 2003 from employment – Appeal dismissed.

[2010] UKFTT 533 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.426659

Farrow and Others (T/A Kitchen and Bathroom Installations) v Revenue and Customs: FTTTx 3 Nov 2010

Partnership return, section 12AA Taxes Management Act 1970 (‘TMA’) – late filing penalty, section 93A TMA – filing paper return after both paper and electronic deadline – failure of HMRC to provide free software for electronic filing of partnership return – appeal dismissed

[2010] UKFTT 534 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.426656

John Smith and Son v Moore (H M Inspector of Taxes): HL 12 Apr 1921

A coal merchant carrying on business under a firm name instructed his testamentary trustees to make over his business with its whole assets to his son at a valuation. One of the items at his death on 7th March 1915, as from which date the business was taken over by his son, consisted of certain coal contracts which were entered in the valuation at pounds 30,000, and none of which extended beyond 31st December 1915. Held (Viscount Finlay dissenting) (aff. judgment of Second Division, diss. Lord Salvesen) that for the purpose of ascertaining the profits for the accounting period from 7th March 1915 to 31st December 1915 the pounds 30,000 paid by the son to the trustees was a sum employed as capital in the business and not admissible as a deduction.

Viscount Haldane, Viscount Cave, Viscount Finlay, Lord Moulton, and Lord Sumner
[1921] UKHL TC – 12 – 266, [1921] UKHL 313, 58 SLR 313
Bailii, Bailii
Scotland

Income Tax

Updated: 12 November 2021; Ref: scu.632632

Wiesenfeld and Strom v Revenue and Customs: FTTTx 20 Dec 2018

Income Tax/Corporation Tax : Partnership – relief claimed for trading losses incurred on a venture in Poland – whether or not claimants were trading in partnership or through a corporate vehicle – held trading through a corporate vehicle – appeal dismissed – penalties assessed without maximum discount for telling – held that maximum discount for telling should be given

[2018] UKFTT 766 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.632487

Cemal v Revenue and Customs: FTTTx 14 Aug 2017

(Income Tax/Corporation Tax : Other) – INCOME TAX – Notice to taxpayer under Schedule 36 FA 2008 for private bank statements – appeal on grounds that all relevant information provided, private bank statements not being relevant – held private bank statements reasonably required by HMRC for checking taxpayer’s tax position – appeal dismissed.

[2017] UKFTT 628 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.592634

Lobler v Revenue and Customs: UTTC 26 Mar 2015

Income Tax- ITTOIA 2005- effect of partial surrenders of insurance policies by individual- did claimant make a mistake for which rectification is available? Yes. Should s. 539 of ITTOIA or s. 50 of TMA 1970 be read so as to remove restrictions on deficiency relief or to reduce the tax payable? No. Can the FTT entertain the public law issues? No.

[2015] UKUT 152 (TCC), [2015] BTC 515, [2015] STI 1398, [2015] STC 1893
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.549077

Glyn v Revenue and Customs: FTTTx 8 Nov 2013

FTTTx Income Tax – Whether the Appellant was non-UK resident in the tax year 2005-2006 – retention of the Appellant’s established home in the UK to which the Appellant returned on a number of occasions (often then having traditional Jewish ‘Friday night dinners’ with his and his wife’s son and daughter) – whether the Appellant had established a ‘definite break’ at the point of his contended acquisition of non-UK residence – whether the Appellant’s retained UK house remained a habitual abode for a settled purpose – Appeal allowed

[2013] UKFTT 645 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.518611

Parsons v Revenue and Customs: FTTTx 10 Mar 2010

FTTTx INCOME TAX – SELF-EMPLOYMENT INCOME – EXPENSES – stunt performer in film and television productions – expenses for (1) private medical operation on knee, (2) chiropractor treatment, (3) massages, (4) dental treatment, and (5) health and fitness – whether deductible as ‘wholly and exclusively laid out or expended for the purposes of the trade or profession’ – yes in the particular circumstances of the case as to (1), (2), (3) and (4) – no in the particular circumstances of the case as to (5) – Appeal allowed in part.

[2010] UKFTT 110 (TC)
Bailii
England and Wales

Income Tax

Updated: 12 November 2021; Ref: scu.408970

Reed v Revenue and Customs: FTTTx 28 Jan 2011

FTTTx INCOME TAX – schedule D – trade – deduction – expenses – building subcontractor – working at different building sites for successive short periods – cost of travel between home and site – appeal succeeds

Jennifer Trigger (Judge)
[2011] UKFTT 92 (TC)
Bailii
England and Wales

Income Tax, Construction

Updated: 11 November 2021; Ref: scu.442829

Pendle v Revenue and Customs: FTTTx 20 Jan 2015

FTTTx INCOME TAX – self-assessment – penalty for late filing of return – self-assessment declaration that taxpayer ‘may have to pay financial penalties and face prosecution’ if he gives false information – whether statutory obligation to make declaration – whether FA 2009, Sch 55 penalties are criminal under the European Convention on human rights – whether they are criminal under UK law – whether Bill of Rights 1689 prevents HMRC from issuing civil penalties – whether ‘substantial compliance’ with the statutory provisions sufficient to prevent a penalty arising – whether belief that Bill of Rights prevented issuance of civil penalties reasonable, so as to give the taxpayer a reasonable excuse – meaning of ‘circumstances’ in the context of ‘special circumstances’ – whether special circumstances exist – appeal dismissed.

[2015] UKFTT 27 (TC)
Bailii
European Convention on Human Rights, Bill of Rights 1689, Finance Act 2009 Sch 55
England and Wales

Income Tax, Human Rights

Updated: 11 November 2021; Ref: scu.542042

Dr Barnardo’s Homes National Incorporated Association v Commissioners for Special Purposes of the Income Tax Acts: HL 14 Mar 1921

A testator had left his residuary estate to a charity. His estate included some investments. During the course of the administration of the estate, the executors received income from the investments on which tax had been deducted at source. The income received was eventually handed over to the charity as part of the residue, and the charity argued that it should be entitled to a repayment of the tax deducted at source.
Held: The charity was not entitled to repayment of the tax.
Viscount Cave stated: ‘When the personal estate of a testator has been fully administered by his executors and the net residue ascertained, the residuary legatee is entitled to have the residue as so ascertained, with any accrued income, transferred and paid to him: but until that time he had no property in any specific investment forming part of the estate or in the income from any such investment, and both corpus and income are the property of the executors and are applicable by them as a mixed fund for the purposes of administration.’
Viscount Finlay said: ‘It appears to me that the present case is really decided by the decision of this House in Lord Sudeley’s Case. It was pointed out in that case that the legatee of a share in a residue has no interest in any of the property of the testator until the residue has been ascertained. His right is to have the estate properly administered and applied for his benefit when the administration is complete. The income from which this income tax was deducted was not the income of the charity. It was the income of the executors.’
Lord Atkinson said: ‘The case of Lord Sudeley v. Attorney-General . . conclusively established that until the claims against the testator’s estate for debts, legacies, testamentary expenses, etc., have been satisfied, the residue does not come into actual existence. It is a non-existent thing until that event has occurred. The probability that there will be a residue is not enough. It must be actually ascertained.’
Income Tax – Residuary bequest to Charity.- Will disputed – Income of testator’s estate prior to distribution received under deduction of Income Tax. – Claim by Charity for repayment of Income Tax deducted from accrued income of residue. – Rule Nisi for Mandamus

Viscount Cave, Viscount Finlay
[1921] 2 AC 1, [1921] UKHL TC – 7 – 646
Bailii
Income Tax Act 1842 88
England and Wales
Citing:
Cited – Sudeley v Attorney-General HL 1897
The husband had died leaving part of his residuary estate to his widow. She then died before the estate was fully administered. Both died domiciled in England. The husband’s estate included mortgages of land in New Zealand and the House was asked . .

Cited by:
Cited – Raymond Saul and Co (A Firm) v Holden and Another; In re Hemming (deceased) ChD 12-Nov-2008
The claimant was sole residuary legatee of his mother’s estate. He became bankrupt, but was released by automatic discharge from the bankruptcy before the administration of the estate was completed. He challenged the solicitors who wished to pay the . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Income Tax

Leading Case

Updated: 11 November 2021; Ref: scu.524660

ZXCV Ltd and others v Revenue and Customs: SCIT 20 Aug 2008

SCIT INCENTIVE PAYMENTS – Online PAYE returns – Whether return required by PAYE regulations – Whether Appellant companies formed for an impermissible purpose – 500 companies formed all with the same director – None had trades or businesses – andpound;1 less 22p tax recorded as directors’ remuneration for each company – Appeal against decision not to make incentive payments – Income Tax (Incentive Payments for Voluntary Electronic Communication of PAYE Returns) Regs 2003 (SI 2003/2494) and SI 2005/826 – Appeals dismissed.

[2008] UKSPC SPC00706
Bailii
England and Wales

Income Tax

Updated: 11 November 2021; Ref: scu.276351

Forbes v Revenue and Customs: FTTTx 29 Jun 2011

Income Tax -Set off of losses against general income -Section 380 ICTA 1988 -Restriction on set off under Section 384 (6)ICTA of ‘plant and machinery for leasing in the course of a trade’ -Whether losses so restricted ? -Partly – Whether discovery assessment under Section 29 TMA 1970 out of time -NO -Appealed allowed in part.

[2011] UKFTT 425 (TC)
Bailii
England and Wales

Income Tax

Updated: 11 November 2021; Ref: scu.443110

Coffey (T/A Coffey Builders) and Another v Revenue and Customs: FTTTx 4 Nov 2011

Whether 1st Appellant was employed or self-employed in carrying out refurbishment of 2nd Appellant’s medical clinic – whether 2nd Appellant was employer of 1st Appellant or not – 1st Appellant’s appeal dismissed – 2nd Appellant not found to be employer

[2012] UKFTT 193 (TC)
Bailii

Employment, Income Tax

Updated: 11 November 2021; Ref: scu.462576

Poole Leisure Ltd v Revenue and Customs: FTTTx 6 Mar 2015

FTTTx INCOME TAX – PAYE – tax code notice – coding change – calculation of earnings without reference to previous pay and tax – resultant under-deduction of PAYE by employer – notice of determination issued – argument that adviser had taken reasonable care and made error in good faith – effect of determination – exclusion of any direction that employer not liable to pay PAYE excess to HMRC – determination not precluded by any prior direction under reg 72(5) – on facts, no basis for determination to be adjusted – consideration whether conditions for direction would have been fulfilled – no – absence of any basis on which liability for excess could be placed on employee rather than employer – no means of seeking relief through Tribunal for liability falling on employer – appeal dismissed

[2015] UKFTT 109 (TC)
Bailii
England and Wales

Income Tax

Updated: 10 November 2021; Ref: scu.544589

The British Broadcasting Corporation v Johns (HM Inspector of Taxes): CA 5 Mar 1964

The BBC claimed to be exempt from income tax. It claimed crown immunity as an emanation of the crown. The court had to decide whether the BBC was subject to judicial review.
Held: It is not a statutory creature; it does not exercise statutory functions; it is not in any general way subject to statutory guidance. The traditional view of it is that it does not exercise a governmental function, and is therefore not subject to judicial review.
Counsel claimed for the government the right to grant a monopoly of broadcasting. LJ Diplock replied: ‘It is 350 years and a civil war too late for the Queen’s courts to broaden the prerogative. The limits within which the executive government may impose obligations or restraints upon citizens of the United Kingdom without any statutory authority are now well settled and incapable of extension. In particular, as respects monopolies the Crown’s claim to a general right to the monopoly of any activity was denied and circumscribed by the Statute of Monopolies, 1623. Today, save in so far as the power is preserved by the Statute of Monopolies, or created by other statutes, the executive government has no constitutional right either itself to exercise through its agents or to confer upon other persons a monopoly of any form of activity.’
and ‘The modern rule of construction of statutes is that the Crown, which today personifies the executive government of the country and is also a party to all legislation, is not bound by a statute which imposes obligations or restraints on persons or in respect of property unless the statute says so expressly or by necessary implication.’
As to whether a statute was binding on the Crown: ‘Since laws are made by rulers of the subjects, a general expression in a statute such as ‘any person’ descriptive of those on whom the statute imposes obligations or restraints is not to be read as including the ruler himself . . The modern rule of construction of statutes is that the Crown, which today personifies the executive Government of the country and is also a party to all legislation, is not bound by a statute which imposes obligations or restraints on persons or in respect of property unless the statute says so expressly or by necessary implication.’

Willmer LJ, Diplock LJ, Danckwerts LJ
[1965] Ch 32 CA, [1964] EWCA Civ 2, [1964] 41 TC 471, (1964) 43 ATC 38, [1964] 1 All ER 923, [1964] 2 WLR 1071, [1964] TR 45, [1964] RVR 579, [1964] 10 RRC 239
Bailii
England and Wales
Cited by:
Cited – Regina v British Broadcasting Corporation, ex parte Referendum Party; Regina v Independent Television Commission, ex parte Referendum Party Admn 24-Apr-1997
The Referendum Party challenged the allocation to it of less time for election broadcasts. Under the existing agreements, having fielded over 50 candidates, they were allocated only five minutes.
Held: Neither the inclusion of past electoral . .
Cited – Oakley Inc v Animal Ltd and others PatC 17-Feb-2005
A design for sunglasses was challenged for prior publication. However the law in England differed from that apparently imposed from Europe as to the existence of a 12 month period of grace before applying for registration.
Held: Instruments . .
Cited – Bancoult, Regina (on the Application of) v Secretary of State for Foreign and Commonwealth Affairs (No 2) HL 22-Oct-2008
The claimants challenged the 2004 Order which prevented their return to their homes on the Chagos Islands. The islanders had been taken off the island to leave it for use as a US airbase. In 2004, the island was no longer needed, and payment had . .
Dictum adopted – Revenue and Customs, Regina (on The Application of) v HM Coroner for The City of Liverpool Admn 21-May-2014
The Coroner, conducting an investigation into a person’s death, issued notices under para 1(2) of Schedule 5 to the Coroners and Justice Act 2009, requiring the Revenue and Customs Commissioners to provide occupational information concerning the . .
Cited – Black, Regina (on The Application of) v Secretary of State for Justice Admn 5-Mar-2015
The serving prisoner said that new general restrictions on smoking in public buildings applied also in prisons. were a breach of his human rights. The only spaces where prisoners were allowed now to smoke were their cells, and he would share cells . .
Cited – Secretary of State for Justice v Black CA 8-Mar-2016
The Secretary of State appealed against a declaration that the provisions prohibiting smoking in pubic places applied in prisons.
Held: The appeal succeeded. . .
Cited – Black, Regina (on The Application of) v Secretary of State for Justice SC 19-Dec-2017
The Court was asked whether the Crown is bound by the prohibition of smoking in most enclosed public places and workplaces, contained in Chapter 1 of Part 1 of the Health Act 2006.
Held: However reluctantly, the claimant’s appeal was . .
Cited – Lord Advocate v Dumbarton District Council HL 1989
The House was asked whether the Ministry of Defence was entitled to cone off a section of the A814 road without the permission of the roads authority under the Roads (Scotland) Act 1984 or the local planning authority under the Town and Country . .

Lists of cited by and citing cases may be incomplete.

Media, Judicial Review, Income Tax

Leading Case

Updated: 10 November 2021; Ref: scu.181973

Easow and Others v Revenue and Customs: FTTTx 18 Sep 2013

FTTTx INCOME TAX – discovery assessments – whether made within time limits – which time limits applied – whether conduct of respective appellants fraudulent or negligent – whether in relation to subsequent assessments their conduct negligent or deliberate – held, assessments made within time – assessments confirmed – penalties confirmed – appeals dismissed
CORPORATION TAX – discovery assessments – whether within time limits – which time limits applied – whether conduct of company and directors fraudulent or negligent – held, assessments made within time – assessments confirmed – assessments under s 419 ICTA 1988 confirmed – penalties confirmed – appeal dismissed

[2013] UKFTT 493 (TC)
Bailii
England and Wales

Income Tax, Corporation Tax

Updated: 10 November 2021; Ref: scu.516294

Grays Timber Products Ltd v Revenue and Customs: SC 3 Feb 2010

An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was payable.
Held: The appeal failed. The Revenue should calculate the price which might be agreed between a hypothetical purchaser and seller making proper allowance for the particular characteristics of the seller and of the shareholding. There was real doubt as to whether Parliament had, in Part 7, enacted a scheme which drew a coherent and consistent distinction between intrinsic and extrinsic rights attaching to shares and other financial instruments.
Lord Walker explained that the provisions of Part 7 reflect three different legislative purposes: ‘First there is Parliament’s recognition that it is good for the economy, and for social cohesion, for employees to own shares in the company for which they work. Various forms of incentive schemes are therefore encouraged by favourable tax treatment
Second, if arrangements of this sort are to act as effective long-term incentives, the benefits which they confer have to be made contingent, in one way or another, on satisfactory performance. This creates a problem because it runs counter to the general principle that employee benefits are taxable as emoluments only if they can be converted into money, but that if convertible they should be taxed when first acquired. That principle was stated by Lord Radcliffe in Abbott v Philbin [1961] AC 352, 379
The principle of taxing an employee as soon as he received a right or opportunity which might or might not prove valuable to him, depending on future events, was an uncertain exercise which might turn out to be unfair either to the individual employee or to the public purse. At first the uncertainty was eased by extra-statutory concessions. But Parliament soon recognised that in many cases the only satisfactory solution was to wait and see, and to charge tax on some ‘chargeable event’ (an expression which recurs throughout Part 7) either instead of, or in addition to, a charge on the employee’s original acquisition of rights.
That inevitably led to opportunities for tax avoidance. The ingenuity of lawyers and accountants made full use of the ‘wait and see’ principle embodied in these changes in order to find ways of avoiding or reducing the tax charge on a chargeable event, which might be the occasion on which an employee’s shares became freely disposable (Chapter 2) or the occasion of the exercise of conversion rights (Chapter 3). The third legislative purpose is to eliminate opportunities for unacceptable tax avoidance. Much of the complication of the provisions in Part 7 (and especially Chapters 3A, 3B, 3C and 3D) is directed to counteracting artificial tax avoidance.’
Lord Hope commented that ‘if there is any theme in the Act it is one of anti-avoidance and the closing down of perceived tax loopholes’.

Lord Hope of Craighead, Deputy President, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood and Lord Kerr of Tonaghmore
[2010] UKSC 4, Times 04-Feb-2010, UKSC 2009/0044, [2010] WLR (D) 21, [2010] STI 393, [2010] 2 All ER 1, 2010 GWD 8-145, [2010] BTC 112, [2010] STC 782
Bailii, SC Summ, SC, WLRD, Bailii Summary
Income Tax (Earnings and Pensions) Act 2003 446X(b), Taxation of Chargeable Gains Act 1992
Scotland
Citing:
Cited – Grey and Another (Hunter’s Nominees) v Inland Revenue Commissioners; Orse Gray v IRC HL 2-Nov-1959
The House considered whether certain instruments which were presented for adjudication to stamp duty under section 13 of the Stamp Act 1891, are or are not chargeable with ad valorem duty.
Held: The word ‘disposition’ is to be given its . .
At SCS – Grays Timber Products Ltd v HM Revenue and Customs SCS 13-Feb-2009
The company appealed against a determination by the defendants that when an employee had sold his shares, it had done so at a price over the market value, and in doing so, incurred a charge to income tax.
Held: The appeal failed. . .
Cited – Lynall v Inland Revenue Commissioners HL 2-Jan-1971
The House was asked about the fixing of ‘price . . in the open market’ of a parcel of shares held in a private company. The Finance Act 1894 provided a method of valuation of property for estate duty purposes by reference to what the property would . .
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 – Attorney-General for Ireland v Jameson CA 1905
The court was asked as to the valuation of shares. The shares were subject to restrictions on transfer.
Held: The price which the shares would fetch if sold on the open market should reflect the terms on which the purchaser would be entitled . .
Cited – Salvesen’s Trustees v Inland Revenue Commissioners SCS 1930
The court considered the valuation of shares in a notional purchase. The company’s articles of association contained a provision that the company might at any time, by extraordinary resolution, resolve that any shareholder, other than a director or . .
Cited – Inland Revenue Commissioners v Crossman HL 1937
For a valuation for estate taxes, the value is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date.
Lord Russell of Killowen said that a share is the interest of a . .
Cited – BML Group Ltd v Harman and Another CA 8-Apr-1994
Shareholders of one class sought an order under section 371 which would have had the effect of overriding the class rights of another shareholder. The meeting was proposed to remove two directors who did not have the protection of a shareholder’s . .
Cited – Welton v Saffery 1897
Lord Davey said: ‘Of course, individual shareholders may deal with their own interests by contract in such way as they may think fit. But such contracts, whether made by all or some only of the shareholders, would create personal obligations, or an . .
Cited – Russell v Northern Bank Development Corporation Limited and Others HL 15-Jul-1992
Four directors of the company agreed with each other not to create further share capital. A director seeking to enforce the agreement, appealed against a judgment that the agreement was invalid in seeking to fetter the company’s stautory powers.
Cited – In re Sutherland, dec’d; Winter v Inland Revenue Commissioners HL 1963
The concept of a contingent liability was considered.
Held: In Scots law, a contingent liability is a liability which, by reason of something done by the person bound, may or may not arise depending on the happening of a future event.
Cited – Alexander v Inland Revenue Commissioners CA 1991
The deceased’s flat in the Barbican was to be valued for Capital Transfer Tax. She bought it under right to buy at a substantial discount but subject to a time limited charge for that discount. She died within a year. The flat was subject to a . .
Cited – In re Lynall deceased CA 1968
Harman LJ said: ‘The sale envisaged by the section is, as is agreed, not a real but a hypothetical sale, and must be taken to be a sale between a willing vendor and a willing purchaser: see, for instance, the speech of Lord Guest in In re Sutherland . .
Cited – Duke of Buccleuch v Inland Revenue Commissioners HL 1967
When a valuation was to be attributed to a property the test must be applied to the property as it actually existed and not to some other property, even if in real life a vendor would have been likely to make some changes or improvements before . .
Cited – Brady v Brady HL 1988
An employment agreement contravening section 151 of the 1985 Act is unenforceable. The obvious mischief to which section 151 is directed is the case of a bidder financing his bid from the funds of the company acquired. The larger purpose had to be . .

Cited by:
Cited – UBS Ag and Another v Revenue and Customs SC 9-Mar-2016
UBS AG devised an employee bonus scheme to take advantage of the provisions of Chapter 2 of the 2003 Act, with the sole purpose other than tax avoidance, and such consequential advantages as would flow from tax avoidance. Several pre-ordained steps . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Capital Gains Tax

Leading Case

Updated: 10 November 2021; Ref: scu.396588

Town Investments Ltd v Department of the Environment: HL 2 Mar 1977

The House considered the application of Orders made under the Counter-Inflation Acts 1972 and 1973 to premises let initially to the Minister of Works and then to the Secretary of State for the Environment for occupation by civil servants. Each of the relevant counter-inflation Orders contained definitions of ‘business tenancy’ and ‘business’.
Held: In view of the mischief at which the Counter-Inflation Acts 1972 and 1973 and the Orders made under them had been aimed, namely to curb inflation, a broad construction was to be given to ‘business’ in the definition of the tenancies to which the Orders of 1972 and 1973 applied. It should be interpreted as widely as it would be in covenants and leases restricting the user of demised premises. Accordingly, that interpretation was wide enough to include the purposes for which the premises in question were occupied by the Crown, so that the premises were occupied for the purposes of a business within the meaning of the counter-inflation Orders.
Lord Diplock said that business was ‘an etymological chameleon; it suits its meaning to the context in which it is found. It is not a term of legal art . . [as to dicta in Rolls v Miller] . . That was said by the Lord Justice in connection with the construction of a covenant in a lease against the carrying on of any trade or business on the demised premises; and ever since then there has been a consistent line of cases in which this broad meaning has been ascribed to the word ‘business’ in the context of covenants in leases restricting the permitted user of the demised premises. It appears to me to be clear beyond argument that the use made of the premises that are the subject of the instant appeals to accommodate civil servants engaged in what consistently with common usage could be quite properly described as ‘government business’ would constitute a breach of a covenant in a lease against permitting any business to be carried on upon the premises. The Crown or government through its servants is carrying out there a duty which requires attention.’

Lord Diplock, Lord Simon of Glaisdale
[1978] AC 359, [1977] UKHL 2, [1977] 34 P and CR 48, [1977] 2 WLR 450, [1977] 1 All ER 813
Bailii
England and Wales
Citing:
Cited – Rolls v Miller CA 1884
The court was asked as to the effect of a restrictive covenant requiring a house not to be used for trade or business. Lindley LJ said that the dictionary meanings of the term ‘business’ embrace ‘almost anything which is an occupation, as . .

Cited by:
Cited – HM Revenue and Customs v Salaried Persons Postal Loans Ltd ChD 7-Apr-2006
The company had ceased trading, but rental income was still generated from its former premises. The Revenue sought to include the receipt in calculations of whether the company was entitled to a small company corporation tax rate. The Revenue . .
Cited – Lyndendown Ltd v Vitamol Ltd CA 6-Jul-2007
At the end of the lease, the subtenant had failed to comply with his obligation to repair the property, leaving the head tenant liable to the landlord. The landlord had issued a letter which forgave the tenant from his obligations.
Held: The . .
Cited – BAPIO Action Ltd and Another, Regina (on the Application of) v Secretary of State for the Home Department and Another HL 30-Apr-2008
The House considered whether the Secretary of State for Health acted lawfully in issuing guidance as to the employment of foreign doctors to employing bodies within the National Health Service in April 2006.
Held: The secretary of state’s . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Landlord and Tenant

Leading Case

Updated: 10 November 2021; Ref: scu.242606

Philpott and Others v Revenue and Customs: FTTTx 29 Aug 2014

FTTTx INCOME TAX – in specie contribution to funded unapproved retirement benefits scheme – whether paid in respect of particular directors or employees – basis of allocation to employees in absence of allocation by contributing company – whether arrangements a sham or other pretence

[2014] UKFTT 853 (TC)
Bailii
England and Wales

Income Tax

Updated: 10 November 2021; Ref: scu.536406

Micro Fusion 2004-1 Llp v Revenue and Customs: SCIT 30 Jun 2008

Income Tax – Film Production partnership

SCIT Income tax – limited liability partnership – whether partnership engaged in trade of exploitation of films – yes – whether film constituted trading stock so as to deny relief under s 42 F(No 2)A 1992 or s 48 F(No 2)A 1997 – no – date of commencement of partnership’s business and basis period applicable – s 40B(3)(b)(ii) F(No 2)A 1992 – date film completed – s 43(3) F(No 2)A 1992 – whether arrangements for exploitation of film a deferred income agreement in respect of a film which is within s 60 FA 2005 – no – whether film consultancy fees incurred deductible – yes.

[2008] UKSPC SPC00695
Bailii
England and Wales

Income Tax, Media

Updated: 09 November 2021; Ref: scu.273105

Curran v Revenue and Customs: FTTTx 14 Aug 2012

FTTTx Income tax – claim for relief for interest paid under s 353 ICTA – whether payment of net present value of interest to accrue was ‘interest’ eligible for relief – whether interest paid in excess of a reasonable commercial rate – whether interest relief was sole or main benefit expected to accrue to taxpayer from the transaction under which the interest was paid – s 787 ICTA
Settlement agreement – s 54 TMA, s 5 CRCA – whether ultra vires as a forward tax agreement – whether voidable for material non-disclosure – whether applicable for periods after disposal by taxpayer of relevant investments

[2012] UKFTT 499 (TC)
Bailii
England and Wales

Income Tax, Taxes Management

Updated: 09 November 2021; Ref: scu.466086

A Guarantor v Revenue and Customs: SCIT 5 Aug 2008

Guarantor’s payments not deductible

SCIT INCOME TAX – director’s personal guarantee of company’s debts – director resigned from directorship and left company – guarantee then called on – whether payment made by director an allowable deduction – ITEPA 2003 s 336 – whether conditions satisfied – no – appeal dismissed.

[2008] UKSPC SPC00703
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.273110

Inland Revenue Commissioners v Joiner: HL 26 Nov 1975

HL Surtax – Tax advantage – Transaction in securities – Company recon- struction – Surplus assets o f old company distributed in voluntary liquidation – Agreement for liquidation providing for agreed methods o f valuation and distribution – Whether (a) whole scheme o f reconstruction, (b) liquidation agreement, (c) distribution in liquidation a transaction in securities – Whether tax advantage a consequence o f any transaction but the liquidation – Income and Corporation Taxes Act 1970 (c. 10), ss. 460 and 46
The phrase ‘a transaction in securities’ does not include the liquidation of a company. Taxpayers entered into a shareholders’ agreement which varied the rights attached to their shares in important respects before putting the company into liquidation. The variations were all necessary steps in order to achieve the taxpayers’ objective, which was to receive the undistributed profits of the company as surplus assets in the liquidation (and therefore free of surtax) while keeping the business itself in existence. The Court of Appeal had held that the liquidation by itself was a transaction in securities. The Revenue did not contend that a straightforward liquidation without any variation of the rights attached to the shares was a transaction in securities, and the House did not hold that it did. All members of the Committee rested their decision on the ground given by Goulding J at first instance, that the variation of rights constituted a transaction in securities and that accordingly the tax advantage was obtained in consequence of the combined effect of a transaction in securities and the liquidation of a company.
It is a legitimate purpose of legislation by Parliament to clarify the law by making it clear in which of two alternative meanings the ambiguous language of an earlier statute was to be understood, but that it would only be if the language of a provision in an existing statute was ambiguous that it would be legitimate to infer that a purpose of the subsequent statute was to remove doubts as to what the law had always been.
Lord Diplock discussed the nature of a consolidating Act: ‘The purpose of a consolidation Act is to remove this difficulty by bringing together in a single statute all the existing statute law dealing with the same subject-matter which forms the general context in which the particular provisions of the Act fall to be construed, so that it will no longer be necessary to seek that context in a whole series of amended and re-amended provisions appearing piecemeal in earlier statutes.
This is the only purpose of a consolidation Act; this is the only ‘mischief’ it is designed to cure. It is true that a consolidation Act is not intended to alter the law as it existed immediately before the Act was passed, but to treat this absence of intention as justifying recourse to the previous legislation repealed by the consolidation Act in order to ascribe to any of the provisions of that Act a meaning different from that which it would naturally bear when read only in the context of the other provisions of the consolidation Act itself, would be to defeat the whole purpose of this type of legislation-to allow the absence of a tail to wag the dog.’

Lord Wilberforce, Viscount Dilhorne, Lord Diplock
[1975] 1 WLR 1701, [1975] UKHL TC – 50 – 449, 50 TC 449, [1975] STC 657, [1975] TR 257, [1975] 3 All ER 1050, [1975] TR 77
Bailii
Finance Act 1960 28
England and Wales
Cited by:
Cited – Inland Revenue Commissioners v Laird Group plc CA 30-Apr-2002
The taxpayer had sources of foreign income. Arrangements were made to take the benefit through the payment of interim dividends, which it intended to use to set off against liability for advance corporation tax. The Commissioner contended that these . .
Cited – Inland Revenue Commissioners v Sema Group Pension Scheme Trustees CA 19-Dec-2002
The taxpayers appealed a notice under section 703(3) to counteract the tax advantage received by them from a share buy-back scheme. The scheme was an approved pension scheme, under which the quoted company agreed to buy back its own shares.
Cited – Her Majesty’s Commissioners of Inland Revenue v Laird Group plc HL 16-Oct-2003
Was the payment of a dividend in respect of shares ‘a transaction in securities’ or ‘a transaction relating to securities’ within the meaning of section 703.
Held: ‘As a matter of ordinary language, the creation, issue, sale, purchase, . .
Cited – Cantrell v Wycombe District Council CA 29-Jul-2008
The appellant had bought a house at auction. It had previously been sold by a local authority subject to a covenant by the buyer allowing the authority to nominate tenants. The covenant was said to be binding on successors in title, and was . .
Cited – Scottish Widows Plc v Revenue and Customs SC 6-Jul-2011
The taxpayer insurance company had transferred sums from accounts designated as Capital Reserves. The Revenue said that these were properly part of the profit and loss accounts for the respective tax years, and chargeable receipts.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Constitutional

Leading Case

Updated: 09 November 2021; Ref: scu.180845

Needs v Revenue and Customs: FTTTx 30 Jun 2011

INCOME TAX – PENALTIES FOR LATE FILING RETURNS – No reasonable excuse for years ending 5 April 2006 and 2007 – Appeals dismissed – HMRC failed to establish tax due for year ending 5 April 2008 – No tax due for year ending 5 April 2009 – Appeals allowed.
INCOME TAX – SURCHARGE FOR NON PAYMENT OF TAX – No reasonable excuse – Appeals dismissed

[2011] UKFTT 434 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.443132

Ebrill v Revenue and Customs: FTTTx 4 Apr 2012

INCOME TAX – Enquiry into self-assessment return – Appeal against closure notice – Deposits in bank account claimed by the Appellant in oral evidence to be loans or gifts – Absence of documentary evidence supporting claim – Closure notice treating the deposits as earnings – Whether HMRC acted perversely or in bad faith – No – Appeal dismissed

[2012] UKFTT 240 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.462662

Harris v Revenue and Customs: FTTTx 18 Aug 2010

FTTTx Income tax – gift aid – s 25 FA 1990 – gifts to charity under deed of variation of a deceased’s estate – s 142 IHTA 1984 – – whether gift a qualifying donation – whether donors received a benefit in consequence of making the gifts – s 25(2)(e) FA 1990.

Berner J
[2010] UKFTT 385 (TC)
Bailii
Finance Act 1990 25, Inheritance Tax Act 1984 142(1), Taxation of Chargeable Gains Act 1992 62(6)
England and Wales

Income Tax, Charity

Updated: 09 November 2021; Ref: scu.422354

J and M Interiors (Scotland) Ltd v Revenue and Customs: FTTTx 13 Feb 2014

FTTTx CONSTRUCTION INDUSTRY SCHEME – failure to deduct tax from payments made to sub-contractors – whether contractor took reasonable care – yes – whether error made in good faith – yes – appeal allowed – Regulation 9 Income Tax (Construction Industry Scheme) Regulations 2005

[2014] UKFTT 183 (TC)
Bailii
England and Wales

Income Tax, Construction

Updated: 09 November 2021; Ref: scu.521790

Regina v Inland Revenue Commissioners, ex parte the National Federation of Self-Employed and Small Businesses Ltd: HL 9 Apr 1981

Limitations on HMRC discretion on investigation

The Commissioners had been concerned at tax evasion of up to 1 million pounds a year by casual workers employed in Fleet Street. They agreed with the employers and unions to collect tax in the future, but that they would not pursue those who had evaded taxes in the past. The Federation challenged the concession. The Revenue said it did not have standing to make the challenge.
Held: It was relevant to consider the strength of the case that the Commissioners were acting beyond their powers. The Board are charged by statute with the care, management and collection on behalf of the Crown of income tax, corporation tax and capital gains tax. It has a wide discretion as to the best means of obtaining for the national exchequer from the taxes committed to their charge, the highest net return that is practicable having regard to the staff available to them and the cost of collection. The board is under a statutory duty of confidentiality with respect to information about individual taxpayers’ affairs that has been obtained in the course of their duties in making assessments and collecting the taxes; and this imposes a limitation on their managerial discretion. If it were established that the board were proposing to exercise or to refrain from exercising its powers not for reasons of ‘good management’ but for some extraneous or ulterior reason, that action or inaction of the board would be ultra vires and would be a proper matter for judicial review if it were brought to the attention of the court by an applicant with ‘a sufficient interest’ in having the board compelled to observe the law. In the daily discharge of their duties inspectors are constantly required to balance the duty to collect ‘every part’ of due tax against the duty of good management. This conflict of duties can be resolved only by good managerial decisions, some of which will inevitably mean that not all the tax known to be due will be collected.
Lord Diplock justified the modern approach to judicial review: ‘It would, in my view, be a grave lacuna in our system of public law if a pressure group, like the federation, or even a single public-spirited taxpayer, were prevented by outdated technical rules of locus standi from bringing the matter to the attention of the court to vindicate the rule of law and get the unlawful conduct stopped. The Attorney-General, although he occasionally applies for prerogative orders against public authorities that do not form part of central government, in practice never does so against government departments. It is not, in my view, a sufficient answer to say that judicial review of the actions of officers or departments of central government is unnecessary because they are accountable to Parliament for the way in which they carry out their functions. They are accountable to Parliament for what they do so far as regards efficiency and policy, and of that Parliament is the only judge; they are responsible to a court of justice for the lawfulness of what they do, and of that the court is the only judge.’ Section 1 of the 1970 Act gave the Commissioners ‘a wide managerial discretion as to the best means of obtaining for the national exchequer from the taxes committed to their charge, the highest net return that is practicable having regard to the staff available to them and the cost of collection.’ ‘If on quick perusal of the material available the court thinks that it discloses what might on further consideration turn out to be an arguable case in favour of granting the relief sought it ought, in the exercise of a judicial discretion, to give leave.’
Lord Wilberforce said that ‘the whole system . . involves that . . matters relating to income tax are between the commissioners and the taxpayer concerned’, and that the ‘total confidentiality of assessments and of negotiations between individuals and the revenue is a vital element in the working of the system’

Lord Scarman, Lord Diplock, Lord Roskill, Lord Fraser of Tullybelton, Lord Wilberforce
[1982] AC 617, [1981] UKHL 2, [1981] 2 All ER 93, [1981] 2 WLR 722, [1981] UKHL TC – 55 – 133, [1981] 1 WLR 793, [1981] TR 215, 55 TC 24, [1981] STC 344
Bailii, Bailii
Taxes Management Act 1970 1
England and Wales
Cited by:
Cited – Regina on the Application of Wilkinson v The Commissioners of Inland Revenue CA 18-Jun-2003
The claimant had not received the same tax allowance following his wife’s death as would have been received by a woman surviving her husband. That law had been declared incompatible with Human Rtights law as discriminatory, but the respondent . .
Cited – Corner House Research, Regina (on the Application of) v Secretary of State for Trade and Industry CA 1-Mar-2005
The applicant sought to bring an action to challenge new rules on approval of export credit guarantees. The company was non-profit and founded to support investigation of bribery. It had applied for a protected costs order to support the . .
Cited – Regina v Secretary of State for Home Department ex parte Augusto Pinochet Ugarte Admn 27-May-1999
The applicant, the former president of Chile, sought to challenge an order allowing an application for his extradition to proceed. He said that once the matters deemed inadmissible had been excluded, there was insufficicient ground to allow the . .
Cited – Wilkinson, Regina (on the Application Of) v Inland Revenue HL 5-May-2005
The claimant said that the widows’ bereavement tax allowance available to a wife surviving her husband should be available to a man also if it was not to be discriminatory.
Held: Similar claims had been taken before the Human Rights Act to the . .
Cited – Goodson v HM Coroner for Bedfordshire and Luton and Another (No 2) CA 12-Oct-2005
The applicant intended to appeal refusal of her challenge to the verdict of the coroner. For the first time at appeal she sought a protective costs order.
Held: The Corner House case established that a request for a protective costs order . .
Cited – Regina (Nadarajah) v Secretary of State for the Home Department; Abdi v Secretary of State for the Home Department CA 22-Nov-2005
The asylum applicant challenged a certificate given by the respondent that the claim for asylum was manifestly ill-founded. The respondent had made a mistake in applying the appropriate policy, but had sought to correct the error. The claimants . .
Cited – Tweed v Parades Commission for Northern Ireland HL 13-Dec-2006
(Northern Ireland) The applicant sought judicial review of a decision not to disclose documents held by the respondent to him saying that the refusal was disproportionate and infringed his human rights. The respondents said that the documents were . .
Cited – Brown v HM Queen Elizabeth, the Queen Mother, the Executors of the Estate of and others FD 5-Jul-2007
The plaintiff sought the unsealing of the wills of the late Queen Mother and of the late Princess Margaret, claiming that these would assist him establishing that he was the illegitimate son of the latter.
Held: The application was frivolous. . .
Cited – Regina v Secretary of State for Foreign Affairs ex Parte the World Development Movement Ltd Admn 10-Nov-1994
The Movement sought to challenge decisions of the Secretary of state to give economic aid to the Pergau Dam, saying that it was not required ‘for the purpose of promoting the development’ of Malaysia. It was said to be uneconomic and damaging. It . .
Cited – Regina v Her Majesty’s Treasury, Ex parte Smedley CA 19-Dec-1984
The applicant sought, as a taxpayer, to object to the proposed payment of andpound;121m to the European Community without an Appropriation Act, but under an Order in Council. The claim was that a draft Order in Council laid by the Treasury before . .
Cited – Edwards, Regina (on the application of) v Environment Agency HL 16-Apr-2008
The applicants sought to challenge the grant of a permit by the defendant to a company to operate a cement works, saying that the environmental impact assessment was inadequate.
Held: The Agency had been justified in allowing the application . .
Cited – Inland Revenue Commissioners v Nuttall CA 1990
The Revenue and the taxpayer had agreed that the latter should pay andpound;15,000 in consideration of the Revenue taking no proceedings against him for tax penalties or interest. The taxpayer paid only andpound;5,000 and the Revenue sought summary . .
Cited – Stockler v HM Revenue and Customs ChD 22-Sep-2009
The taxpayer appealed against a decision confirming the Commissioners’ power to impose a penalty on him. It was said that his solicitors’ firm had negligently understated its profits. A settlement was proposed allowing a withdrawal of the return, . .
Cited – Oxfam v Revenue and Customs ChD 27-Nov-2009
The charity appealed against refusal to allow it to reclaim input VAT. It also sought judicial review of the decision of the Tribunal not to allow it to raise an argument of legitimate expectation. The charity had various subsidiaries conducting . .
Cited – Axa General Insurance Ltd and Others v Lord Advocate and Others SCS 8-Jan-2010
axaReSCS201
The claimant sought to challenge the validity of the 2009 Act by judicial review. The Act would make their insured and themselves liable to very substantial unanticipated claims for damages for pleural plaques which would not previousl or otherwise . .
Cited – Walton v The Scottish Ministers SC 17-Oct-2012
The appellant, former chair of a road activist group, challenged certain roads orders saying that the respondent had not carried out the required environmental assessment. His claim was that the road had been adopted without the consultation . .
Cited – Ingenious Media Holdings Plc and Another, Regina (on The Application of) v Revenue and Customs SC 19-Oct-2016
The tax payer complained that the Permanent Secretary for Tax had, in an off the record briefing disclosed tax details regarding a film investment scheme. Despite the off the record basis, details were published in a newspaper. His claims had been . .
Cited – Miller, Regina (on the Application of) v The Prime Minister; Cherry QC v Lord Advocate SC 24-Sep-2019
Prerogative act of prorogation was justiciable.
The Prime Minister had prorogued Parliament for a period of five weeks, leaving only a short time for Parliament to debate and act the forthcoming termination of the membership by the UK of the EU. The Scottish Court had decided (Cherry) that the . .
Cited – Black, Regina (on The Application of) v Secretary of State for Justice Admn 5-Mar-2015
The serving prisoner said that new general restrictions on smoking in public buildings applied also in prisons. were a breach of his human rights. The only spaces where prisoners were allowed now to smoke were their cells, and he would share cells . .
Cited – JJ Management Consulting Llp and Others v Revenue and Customs CA 22-Jun-2020
HMRC has power to conduct informal investigation
The taxpayer, resident here, but with substantial oversea business interests, challenged the conduct of an informal investigation of his businesses under the 2005 Act, saying that HMRC, as a creature of statute, are only permitted to do that which . .

Lists of cited by and citing cases may be incomplete.

Taxes Management, Judicial Review, Income Tax

Leading Case

Updated: 09 November 2021; Ref: scu.184332

Fletcher v Revenue and Customs: SCIT 29 Sep 2008

SCIT Claim to set capital loss against income under S. 574 Taxes Act 1988 – Appellant’s claim to have a loss of andpound;50,400, resulting from the initial subscription of Ordinary Shares for andpound;400 and the capitalisation of andpound;50,000 of a loan in return for B Ordinary Shares with restricted rights – Respondents contention that the B Ordinary Shares were worthless at the point of the capitalisation of the debt, such that the allowable loss was restricted to andpound;400 – Rights issue analysis – Appeal allowed in full.

[2008] UKSPC SPC00711, [2008] STC (SCD) 1219
Bailii
Income and Corporation Taxes Act 1988 574
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.277628

Hardakers (Horsforth) Ltd v Revenue and Customs: FTTTx 28 Feb 2012

FTTTx PAYE – penalty for late employer’s return for 2009-10 – evidence that filing was actually made rejected – no reasonable excuse for delay found – penalty not ‘plainly unfair’ – no obligation on HMRC to issue penalties earlier than September 2010 – appeal dismissed.

K Poole TJ
[2012] UKFTT 164 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.451966

Regina (Oriel Support Ltd) v Commissioners for Revenue and Customs: CA 24 Feb 2009

The company used an outsourcing service, which provided its own employees to the clients, and paid them directly and then recovered the wages paid from the claimant.
Held: The company could not deduct PAYE from the workers under its own PAYE reference as ‘another payer’ within the regulations, but had to use that of the outsourcing company. The terms ‘another payer’ and ‘another payee’ were mutual.

Sir Anthony Clarke, Master of the Rolls, Lord Justice Keene and Lord Justice Moses
Times
Income Tax (Pay As You Earn) Regulations 2003 (SI 2003 No 2682) 2
England and Wales
Citing:
See Also – Oriel Support Ltd v Revenue and Customs SCIT 16-May-2007
SCIT COSTS – whether the Revenue acted wholly unreasonably in not particularising its submissions on the Appellant’s failure to comply with compliance testing relation to a sub-contractors’ certificate – yes. . .
See Also – Oriel Support Ltd v Revenue and Customs SCIT 11-Oct-2007
SCIT JURISDICTION – disputed decision concerns the use of employers’ PAYE references – whether an appeal lies to the Special Commissioners – no – appeal dismissed – TMA 1970 ss 1(1) and 31(1)(d); ITEPA 2003 s . .
At SCIT – Oriel Support Ltd v Revenue and Customs VDT 20-Jan-2009
VDT VAT – supplies of services – whether services of workers supplied by trader providing outsourcing service or by employment agencies using that service – the latter – appeal dismissed. . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 09 November 2021; Ref: scu.326974

Cape Brandy Syndicate v Inland Revenue Commissioners: CA 1921

Rowlatt J said: ‘In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied’ and ‘subsequent legislation, if it proceeded on an erroneous construction of previous legislation, cannot alter the previous legislation’.
Lord Sterndale MR said: ‘I quite agree that subsequent legislation, if it proceed upon an erroneous construction of previous legislation, cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier.’
Lord Atkinson: ‘Where the interpretation of a statute is obscure or ambiguous, or readily capable of more than one interpretation, light may be thrown on the true view to be taken of it by the aim and provisions of a subsequent statute.’
Otherwise: Cape Brandy Syndicate v CIR

Rowlatt J, Lord Sterndale MR, Lord Atkinson
[1921] 1 KB 64, 12 Tax Cas 358
England and Wales
Cited by:
Cited – Green and Another v Inland Revenue ChD 11-Jan-2005
The deceased died intestate and with a negative valued personal estate, but with assets in trusts, including a revocable life interest in property. The question was whether his debts could be set off against the trusts interests to reduce them below . .
Approved – Kirkness v John Hudson and Co Ltd HL 1955
Viscount Simonds said: ‘the beliefs or assumptions of those who frame Acts of Parliament cannot make the law’. While subsequent legislation could resolve ambiguity in earlier legislation, it could only do so where the subject of the subsequent . .
Cited – Regina on the Application of Jackson and others v HM Attorney General CA 16-Feb-2005
The applicant asserted that the 2004 Act was invalid having been passed under the procedure in the 1949 Act, reducing the period by which the House of Lords could delay legislation; the 1949 Act was invalid, being delegated legislation, had used the . .
Cited – Peter John St. Barbe Green, David Robert Mitson (Trustees of the Will of Consuelo Dowager Duchess of Manchester v the Commissioners of Inland Revenue ChD 11-Jan-2005
The taxpayer appealed a notice of determination of liability of the estate for Inheritance Tax purposes. He sought to set off an excess of liabilities over assets in the deceased’s own estate against assets held in settlements.
Held: The . .
Cited – Frankland v Commissioners of Inland Revenue CA 7-Nov-1997
Shares which were transferred within the first tax quarter after a death lost the benefit of Inheritance Tax exemption on their transfer into a discretionary trust. . .
Cited – Trustees of BT Pension Schemes and others v Clark (HM Inspector of Taxes) CA 24-Feb-2000
Whether pension fund trustees were engaging in the sub-under-writing of share issues in return for commission payments, was a question of fact for the original court hearing the case, and it was not for an appeal court to set aside that finding of . .
Cited – Commissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
Cited – Ormond Investment Co Ltd v Betts HL 1928
The House considered the interpretation of a statute dealing with public rights of navigation.
Held: ‘Where the interpretation of a statute is obscure or ambiguous, or readily capable of more than one interpretation, light may be thrown on the . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Litigation Practice

Leading Case

Updated: 09 November 2021; Ref: scu.221017

Chauhan v Revenue and Customs: FTTTx 24 Jun 2011

Income tax – failure to notify commencement of self-employment or return profits – amendments to self-assessments and discovery assessments – failure to return capital gains – whether adjustments required to HMRC figures – assessments and amendments to self-assessments confirmed subject to amendment – penalties for failure to notify liability to tax and for incorrect returns – penalties confirmed subject to amendment

[2011] UKFTT 412 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.443092

Bellchambers v Revenue and Customs: FTTTx 19 Mar 2012

Income tax – penalty for not filing P35 – taxpayer sold business before the filing date – whether legally responsible for filing the P35 – evidence incomplete – whether reasonable belief that the return had been filed constituted a reasonable excuse – yes – appeal allowed and penalty set aside.

[2012] UKFTT 204 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.462597

Shaw Cleaning Services v Revenue and Customs: FTTTx 9 Jun 2011

Appeal against the withdrawal of the gross payment status under the Construction Industry Scheme – Appellant failed the compliance test due to the late payment of income tax by the Appellant partners – appeal dismissed – the Appellant had no reasonable excuse

[2011] UKFTT 378 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.443142

Bovey v Revenue and Customs: FTTTx 28 Mar 2012

INCOME TAX – Appellant leaving employment as senior civil servant in April 2007 – Payment by former employer made in December 2007 – Whether a payment in consideration or in consequence of, or otherwise in connection with, the termination of the Appellant’s employment (ITEPA s.401) – In the circumstances of the case, no – Whether ‘earnings’ (ITEPA s.62) – In the circumstances of the case, yes – Appeal dismissed

[2012] UKFTT 226 (TC)
Bailii
England and Wales

Income Tax

Updated: 09 November 2021; Ref: scu.462600

Staatssecretaris van Financien v Kieback: ECJ 18 Jun 2015

Judgment – Reference for a preliminary ruling – Freedom of movement for workers – Tax legislation – Income tax – Income received in a Member State – Non-resident worker – Tax in the State of employment – Conditions

R. Silva de Lapuerta, P
C-9/14, [2015] EUECJ C-9/14, ECLI:EU:C:2015:406
Bailii

European, Income Tax

Updated: 02 November 2021; Ref: scu.549236

Fisher and Others v Revenue and Customs: FTTTx 14 Aug 2014

FTTTx Income Tax – Anti-avoidance – transfer of assets abroad code – s739 ICTA 1988 – appellants were shareholders in UK bookmaker which transferred its telebetting business to Gibraltar – purpose of avoiding betting duty found but not corporation tax or other income tax
Relevance and compatibility of EU freedom of establishment and free movement of capital rights considered – freedoms did not apply as between UK and Gibraltar – freedoms did apply however in respect of first appellant who was national of another Member State (Ireland) – legislation incompatible – interpretation conforming to EU right given – appeals of first appellant allowed
Whether certain assessments defective because conditions for discovery assessment (s29(5) TMA 1970) and time limits (s36 TMA 1970) not met – yes
Appeals of second and third appellants allowed for defective assessments – their appeals for the remaining valid assessments dismissed in principle

Swami Rhaghavan
[2014] UKFTT 804 (TC)
Bailii
Income and Corporation Taxes Act 1988 739
England and Wales
Citing:
See also – Fisher and Others v Revenue and Customs FTTTx 14-Aug-2014
FTTTx Procedure – application to be added as party under Rule 9(3) of Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 by Her Majesty’s Government of Gibraltar on grounds it was uniquely placed . .
Cited – HP Bulmer Ltd and Another v J Bollinger Sa and others CA 22-May-1974
Necessity for Reference to ECJ
Lord Denning said that the test for whether a question should be referred to the European Court of Justice is one of necessity, not desirability or convenience. There are cases where the point, if decided one way, would shorten the trial greatly. . .
Cited – Commissioners of Customs and Excise v Aps Samex 1983
It is generally right for the court to find the facts before referring questions of law to the European Court of Justice.
Bingham J restated the four requirement sfor a reference set out in Bulmer, saying: ‘(1) Will the point be substantially . .

Lists of cited by and citing cases may be incomplete.

Income Tax, European

Updated: 02 November 2021; Ref: scu.535962

Verdegaal, The Executors of The Estate of v Revenue and Customs: FTTTx 9 Sep 2014

FTTTx INCOME TAX – penalties and surcharges for late payment – penalties for late filing – interaction with inheritance tax IHT200 form – outside the time limit to amend – provisional returns not filed – whether actions of advisers provided reasonable excuse – no – whether reliance on advisers provided reasonable excuse – no – whether special circumstances – no – appeals dismissed and penalties upheld

[2014] UKFTT 878 (TC)
Bailii
England and Wales

Income Tax, Inheritance Tax

Updated: 02 November 2021; Ref: scu.536516

Pritchard (Inspector of Taxes) v Arundale: ChD 1971

Megarry J discussed whether tips receieved were part taxable as an emolument: ‘I think the question to be tested in this way is only one question. Either the emoluments are within the statutory word ‘therefrom’, as explained by the cases, or they are not. At one stage in the argument, in commenting on Bridges v Bearsley . . Mr Heyworth Talbot said that the question there was whether the employees in the case got the shares as remuneration for services or as personal gifts. In the Hochstrasser case, in the Court of Appeal, Parker LJ had expressed himself in terms of any benefit in money or money’s worth received by an employee during the course of his employment from his employer as being a taxable profit of his employment, with two exceptions, one of which was a gift to him in his personal capacity: see [1959] Ch 22, at page 54. In the House of Lords Lord Simonds, [1960] AC, at page 389, deprecated this approach, saying it was not for the subject to prove that his case fell within exceptions arbitrarily inferred from the Statute, but for the Crown to prove that the tax is exigible. After a little discussion, I think that Mr Heyworth Talbot accepted that the true issue was not the twofold question whether the benefit fell within the taxable category of remuneration for services (as it may briefly be described) or within the non-taxable category of personal gift, but a single question, namely, whether or not it fell within the taxable category of remuneration for services. ‘Personal gift’ is thus not a category which has to be defined or explained, but merely an example of a transaction which will not fall within the taxable category of remuneration for services. In other words, the question is not one of which two strait-jackets the transaction best fits, but whether it comes within the statutory language, or else, failing to do so, falls into the undefined residuary class of cases not caught by the Statute.’

Megarry J
[1972] 3 All ER 1011, 47 TC 680
England and Wales
Cited by:
Considered – Shilton v Wilmshurst (Inspector of Taxes) CA 1990
The taxpayer was a goalkeeper employed by Nottingham Forest Football Club. On his transfer to Southampton, he was paid pounds 75,000. The revenue appealed a finding that this was not taxable under Schedule E.
Held: To be taxcable it had to be . .
Disapproved – Shilton v Wilmshurst HL 7-Feb-1991
The taxpayer was transferred from one football club to another. He was paid andpound;75,000 to persuade him to move. The revenue appealed a decision that this was not a sum taxable as an emolument under Schedule E by the new employer.
Held: . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Leading Case

Updated: 02 November 2021; Ref: scu.199542

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 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c. 10), ss. 405, 409 and 411.
The taxpayer’s father set out to protect her income from tax. He formed a company (S) and settled the shares on Hayley contingently on attaining the age of 25. Hayley worked through S for five years at a salary. The following year S and Hayley entered into a contract with a film company to render Hayley’s exclusive services for five years for annual sums ranging from $30,000 to $75,000. The profits S were paid by dividend to the trustees of the settlement who accumulated them. Hayley was assessed to surtax on the basis that the overall arrangement was a settlement of which she was a settlor and that she was liable to be assessed on the dividend income accruing to the trustees. The Revenue’s contention was upheld by the Special Commissioners and Goulding J, but failed at the Court of Appeal.
Held: The revenue’s appeal succeeded. Viscount Dilhorne considered that the Special Commissioners had properly concluded that the incorporation of S, the issue of the shares, the making of the settlement, the making of the service agreement were all acts done in furtherance of an integrated scheme planned solely for the benefit of Hayley which was an ‘arrangement’ and therefore a settlement to which the relevant section applied. Hayley had provided funds for the purpose of that settlement so as to be a settlor in respect of it. Referring to Crossland v Hawkins : ‘Similarly, in this case it is, to my mind, taking too narrow a view of the arrangement to conclude that the funds which went to the trustees by way of dividends were just provided by [S]. To do so means shutting one’s eyes to the fact that the source of the dividends was money paid for [Hayley’s] work, and money which but for the arrangement would have been received by her. In my opinion she must be held to have provided funds for the purposes of the ‘settlement’.’

Viscount Dilhorne, Lords Reid, Morris of Borth-y-Gest, Hodson and Salmon
(1974) 49 TC 367, [1974] UKHL TC – 49 – 367, [1975] AC 38, [1974] STC 130, [1974] 2 WLR 325, [1974] 1 All ER 722
Bailii
Income Tax Act 1952 405 409 411
England and Wales
Citing:
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 by:
Cited – Jones v Michael Vincent Garnett (HM Inspector of Taxes) CA 15-Dec-2005
Husband and wife had been shareholders in a company, the wife being recorded as company secretary. The company paid dividenceds to both. The husband appealed a decision that the payment to his wife was by way of a settlement and was taxable in his . .
Cited – 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 . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Leading Case

Updated: 02 November 2021; Ref: scu.236562

Manduca v Revenue and Customs: UTTC 26 May 2015

Income tax – Appeal against closure notice – ‘Investment bonus’ to be paid to hedge fund managers in connection with the transfer of management of the hedge fund from one company to another – Whether payment within Schedule D Case VI – In the circumstances, yes – Appeal dismissed

[2015] UKUT 262 (TTC), [2015] BTC 519, [2015] STC 2002
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.549096

Thakrar v Revenue and Customs: FTTTx 23 Feb 2012

FTTTx INCOME TAX – self assessment – surcharge for late payment of tax – whether reasonable excuse for late payment – whether a time to pay agreement had been negotiated – on facts, no – whether taxpayer honestly and reasonably believed that such an agreement had been negotiated – on facts, no basis for any such belief – appeal dismissed

John Clark
[2012] UKFTT 158 (TC)
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.451993

Sikuta v Hungary: ECHR 27 Jan 2015

ECHR The applicant complained under Article 1 of Protocol No. 1 – read alone and in conjunction with Article 14 of the Convention – that the imposition of 98% tax on the upper bracket of his severance payment constituted an unjustified deprivation of property, or else taxation at a disproportionate rate, with no remedy available.

Helen Keller, P
26127/11 – Committee Judgment, [2015] ECHR 91
Bailii
European Convention on Human Rights P1A1 14
Human Rights

Human Rights, Income Tax

Updated: 01 November 2021; Ref: scu.541940

Simpson and Others (Trustees of the East Berkshire Sports Foundation) v Revenue and Customs: SCIT 19 Jan 2009

SCIT Income Tax – Donations to charity – Assessment made to recover income tax initially refunded, the recovery based on the claim that donations to an alleged charity had not ranked as qualifying donations under section 25 Finance Act 1990 – whether the alleged donations took the form of ‘a payment of a sum of money’ – whether the recipient of the donations was a charity – Appeal dismissed

[2009] UKSPC SPC00732, [2009] STI 514, [2009] STC (SCD) 226, [2009] WTLR 499
Bailii
Finance Act 1990 25
England and Wales

Income Tax, Charity

Updated: 01 November 2021; Ref: scu.373748

Resolute Management Services Ltd and Another v Revenue and Customs: SCIT 27 Aug 2008

Ex gratia termination payment was exempt from tax

SCIT Employee recognising that task for which she had been recruited was complete – over-qualified for continuing job – voluntary resignation notwithstanding loss of redundancy and other benefits of continued employment – ex-gratia payment recognising her decision – whether taxable as earnings – no – whether taxable as a termination payment – yes – whether exempt under UK/US Double Taxation Convention 2001 – yes – appeals allowed.

[2008] UKSPC SPC00710
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.277626

HBOS Treasury Services Plc v Revenue and Customs: FTTTx 12 Oct 2009

FTTTx Corporation Tax – Joint referral of four disputed issues in relation to treatment of derivatives and to capital gains treatment of the sale of a company – scheme for the avoidance of income recognition on a re-couponing of an ‘in the money’ fixed/floating swap – paras 15 and 28 of Schedule 26 to FA 2002 – capital gains value shifting – Section 30 TCGAct 1992- one issue determined in favour of the taxpayer company and three issues determined in favour of HMRC.

Nowlan TJ
[2009] UKFTT 261 (TC), [2009] STI 3105, [2010] SFTD 134
Bailii
England and Wales

Corporation Tax, Income Tax

Updated: 01 November 2021; Ref: scu.409075

HM Revenue and Customs v Taylor and Haimendorf: UTTC 23 Nov 2010

UTTC Income tax – EIS relief – section 291B of ICTA – ‘Connected person’ – condition concerning loan capital – whether loan capital and share capital to be aggregated – whether share capital to be taken at nominal value or subscribed value

[2010] UKUT 417 (TCC), [2011] STI 258, [2011] STC 126, [2011] BTC 1501
Bailii
England and Wales

Income Tax

Leading Case

Updated: 01 November 2021; Ref: scu.428179

Chappell v Revenue and Customs: FTTTx 21 Dec 2012

FTTTx INCOME TAX – tax avoidance scheme designed to obtain a tax deduction in respect of a manufactured overseas dividend treated as an annual payment within section 349 ICTA with no counteracting tax charge – paragraph 4(1) Schedule 23A ICTA and regulation 2B(3) Income Tax (Manufactured Overseas Dividend) Regulations 1992 SI 1993/2004 – whether scheme defeated by the Ramsay principle – held, yes – alternatively whether the annual payment deductible notwithstanding an express provision in regulation 2B(3) that no deduction of tax was required on making the payment – held, no – Earl Howe v CIR and succeeding cases applied – alternatively whether the charge to basic rate tax under section 3 ICTA restricts relief for any deduction for such an annual payment to relief at the higher rate(s) of income tax – held, no – appeal dismissed

John Walters QC
[2013] UKFTT 98 (TC)
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.472268

Andrew Berry v HMRC: UTTC 25 Feb 2011

UTTC 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.

[2011] UKUT 81 (TCC), [2011] BTC 1623, [2011] STC 1057, [2011] STI 636
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.440804

Collins v Revenue and Customs: FTTTx 19 Jun 2012

FTTTx Income tax – Whether payment made to the Appellant constituted emoluments – When the Appellant had not referred to the receipt in his tax return, whether an assessment could validly be made out of time on the basis of asserted neglect by the Appellant in not seeking tax advice as to whether the receipt constituted income – if the receipt constituted emoluments and the assessment was validly made, whether the penalties charged were excessive – Appeal allowed

Nowlam
[2012] UKFTT 411 (TC)
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.462786

Finanzamt Dortmund-Unna v Grunewald: ECJ 24 Feb 2015

grunealdECJ201502

ECJ Grand Chamber – Judgment – Reference for a preliminary ruling – Free movement of capital – Direct taxation – Income tax – Deductibility of support payments made in consideration for a gift by way of anticipated succession – Exclusion of non-residents

V. Skouris, P
C-559/13, [2015] EUECJ C-559/13, ECLI:EU:C:2015:109
Bailii

European, Income Tax

Updated: 01 November 2021; Ref: scu.543256

Scottish Widows Plc v Revenue and Customs: SC 6 Jul 2011

The taxpayer insurance company had transferred sums from accounts designated as Capital Reserves. The Revenue said that these were properly part of the profit and loss accounts for the respective tax years, and chargeable receipts.
Held: The Revenue’s cross appeal succeeded. As a life assurance company, the amounts to be taken into account in computing its profits include its investment income from its long term business fund and any increase in the value of its assets during the accounting period. The amounts to be taken into account under section 83(2) were those listed on the Form 40, the revenue account submitted in respect of a Long Term Buisness Fund. It was necessary to concentrate not on the past history of the legislation, but the meaning of the sections at the relevant time.
The use of the word ‘as’ in ‘as brought into account’ showed that the calculation must be on the basis of what had actually been entered into the regulatory account, through the Form 40. The words of the statute were clear enough to dispel arguments as to alternative meanings put by the taxpayer.

Lord Hope, Deputy President, Lord Walker, Lady Hale, Lord Neuberger, Lord Clarke
[2011] UKSC 32, UKSC 2010/0178, 2011 SLT 749
Bailii, Bailii Summary, SC Summary, SC
Finance Act 1998 Sch 18, Insurance Companies (Accounts and Statements) Regulations 1996 (SI 1996/943), Insurance Companies Act 1982
Scotland
Citing:
At Special Commissioners – Scottish Widows Plc v Revenue and Customs SCIT 24-Jan-2008
SCIT INSURANCE – Life Assurance Business – Finance Act 1989 section 83(2)and(3) – enquiry into Company’s tax returns referral under paragraph 31A of Schedule 18 to the Finance Act 1989 – computation of Case 1 . .
Appeal from – Scottish Widows Plc v HM Revenue and Customs SCS 28-May-2010
The taxpayer insurance company had transferred sums from Capital reserves. The Revenue said that these receipts must be treated as income and chargeable to tax accordingly.
Held: The court (Lord Emslie dissenting) refused the appeal and . .
Cited – Scottish Union and National Insurance Co v Inland Revenue 1889
In computing a life insurance company’s profits for tax purposes, the company may take the actuarial surplus as a suitable starting point for dealing with transfers from reserves. . .
Cited – Revell v Edinburgh Life Insurance Co 1906
. .
Cited – Gresham Life Assurance Society v Styles 1892
Statutory provisions which bring profits and gains into charge to tax are to be construed as directed towards profits and gains in their natural and proper sense – in a sense which no commercial man would misunderstand – and that those words are . .
Cited – Revenue and Customs v William Grant and Sons Distillers Ltd HL 28-Mar-2007
The Revenue appealed findings as to the calculation of profits for corporation tax. The companies had sought to deduct sums from profits for depreciation of unsold stock in accordance with current accounting standards.
Held: ‘the profit and . .
Cited – London County Council v Attorney General 1901
Lord MacNaghten said: ‘Income tax, if I may be pardoned for saying so, is a tax on income. It is not meant to be a tax on anything else.’
Lord Macnaghten said of a relator action: ‘The initiation of the litigation, and the determination of the . .
Cited – Equitable Life Assurance Society v Hyman HL 20-Jul-2000
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . .
Cited – Commissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
Cited – Pepper (Inspector of Taxes) v Hart HL 26-Nov-1992
Reference to Parliamentary Papers behind Statute
The inspector sought to tax the benefits in kind received by teachers at a private school in having their children educated at the school for free. Having agreed this was a taxable emolument, it was argued as to whether the taxable benefit was the . .
Cited – Allchin v Coulthard CA 1942
Lord Greene MR discussed the meaning of the word ‘fund’: ‘The word ‘fund’ may mean actual cash resources of a particular kind (e.g. money in a drawer or a bank), or it may be a mere accountancy expression used to describe a particular category which . .
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 – Farrell v Alexander HL 24-Jun-1976
The House considered the construction of a consolidation Act.
Held: It is ordinarily both unnecessary and undesirable to construe a consolidation Act by reference to statutory antecedents, but it is permissible to do so in a case where the . .
Cited – Vestey v Inland Revenue Commissioners HL 1979
Taxes are imposed upon subjects by Parliament. A citizen cannot be taxed unless he is designated in clear terms by a taxing Act as a taxpayer and the amount of his liability is clearly defined. A proposition that whether a subject is to be taxed or . .
Cited – Inland Revenue Commissioners v Joiner HL 26-Nov-1975
HL Surtax – Tax advantage – Transaction in securities – Company recon- struction – Surplus assets o f old company distributed in voluntary liquidation – Agreement for liquidation providing for agreed methods o f . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Updated: 01 November 2021; Ref: scu.441503

Taylor and Another v Revenue and Customs: FTTTx 11 Mar 2010

FTTTx Income Tax – Enterprise Investment Scheme – Individuals qualifying for relief – Connected persons – 30% of loan capital and issued share capital – Whether 30% of each or 30% of the aggregate – Claimants possessing more than 30% of loan capital and less than 30% of issued share capital – Whether connected to issuing company – No – ICTA 1988 s.291B(1)(b)

[2010] UKFTT 115 (TC), [2010] STI 2126, [2010] SFTD 579
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.408978

Lewis v Revenue and Customs: SCIT 13 Jun 2008

Part time worker travel to office expenses

SCIT EMPLOYMENT INCOME – employee having arrangement for working at home for two or three days a week – travelling expenses between home and office – whether amounts necessarily expended on travelling in the performance of the duties of the office or employment – no – whether expenses of ordinary commuting – yes – appeal dismissed.

[2008] UKSPC SPC00690
Bailii
England and Wales

Income Tax

Updated: 01 November 2021; Ref: scu.273103

HM Revenue and Customs v Hok Ltd: UTTC 23 Oct 2012

UTTC PAYE – employer’s year-end return – penalties for late submission – jurisdiction of First-tier Tribunal – whether includes ability to discharge penalty on grounds of unfairness – no – whether finding that HMRC’s failure to send prompt reminder unfair sustainable – no – whether penalties due – yes – appeal allowed.

Warren J, P, Bishopp TJ PTC
[2012] UKUT 363 (TCC), FTC/81/2011
Bailii
England and Wales

Income Tax

Leading Case

Updated: 01 November 2021; Ref: scu.466696

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 lend them to operating companies in the group when they were needed. All requests for loans were in fact accepted, but if a request had been improper or unreasonable it would have been refused by the local board of directors. One finding was: ‘The directors of Untelrab would have carried out instructions from Unigate so long as they considered that such instructions were not to the detriment of Untelrab and if the instructions were for the benefit of the group they saw no problem with that.’ In 1987, at the request of the parent company, the directors who had previously met in Bermuda resigned and appointed United Kingdom directors in their place. Thereafter board meetings were held in the United Kingdom. However, the Revenue assessed the company to corporation tax on the basis that it had in fact been resident in the United Kingdom throughout. The company appealed.
Held: The appeal was allowed by the Special Commissioners. That a board might do what it was told, did not mean that the control and management elsewhare. The board exercised its discretion and would have refused to carry out an improper or unwise transaction. The subsidiary’s board met in Bermuda and transacted the subsidiary’s business there and would have refused to carry out any proposal which was improper or unreasonable. Although the subsidiary was ready to do as asked, it gave effect to the parent’s wishes and the parent did not usurp the control of the subsidiary. The subsidiary’s central management and control was in Bermuda and it was therefore resident there.’

[1996] STC(SCD) 1
Cited by:
Cited – Unit Construction Co Ltd v Bullock HL 30-Nov-1959
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 . .

Lists of cited by and citing cases may be incomplete.

Income Tax

Leading Case

Updated: 01 November 2021; Ref: scu.224814

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 asked as to the meaning of ‘earnings’ in that phrase The context is the payment of an employer’s contribution to a Funded Unapproved Retirement Benefits Scheme Until 2006 such schemes were commonly used to top up sums available through tax-approved pension schemes.
Held: The company’s appeal succeeded. The contributions made by it into a funded unapproved retirement benefits scheme in favour of one of its directors were not a part of the director’s ‘earnings’ for the purposes of section 6(1) of the 1992 Act and the company did not have to to pay national insurance contributions on the value of the contribution.

Lord Neuberger, President, Lord Sumption, Lord Reed, Lord Toulson, Lord Hodge
[2014] UKSC 14, [2014] STI 739, [2014] 1 WLR 810, [2014] WLR(D) 99, UKSC 2012/0162, [2014] Pens LR 203, [2014] 2 All ER 356, [2014] STC 724, [2014] ICR 403, [2014] BTC 8
WLRD, Bailii, Bailii Summary, SC, SC Summary
Social Security Contributions and Benefits Act 1992
England and Wales
Citing:
Cited – Tennant v Smith (Surveyor of Taxes) HL 14-Mar-1892
A Montrose bank manager had been given free accommodation in a bank house which he was required to occupy.
Held: The Inland Revenue could not charge income tax on the value of the accommodation because the employee could not convert the . .
Cited – 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 – Depositors’ Protection Board v Dalia HL 20-May-1994
The House was asked as to the meaning of the word ‘depositor’. Regulations were prayed in aid which were made four years after the date of the enactment.
Held: The protection given by the Depositor Protection Scheme does not extend to . .
Cited – Hanlon v The Law Society HL 1981
The House considered the impact of the statutory charge under the 1974 Act in matrimonial proceedings.
Held: The costs in respect of which the statutory charge bit were the costs of the whole divorce proceedings and not just the financial . .
At UTTC – Forde and McHugh v HM Reveue and Customs UTTC 21-Feb-2011
NATIONAL INSURANCE CONTRIBUTIONS – contribution to FURBS – whether liable for Class I contributions – no – appeal allowed. . .
Appeal from – HM Revenue and Customs v Forde and McHugh Ltd CA 30-May-2012
Sums paid by an employer, other than out of an employee’s salary, which were to provide contingent benefits to an employee, did not fall within the charge to NICs on earnings before the occurrence of the contingency and the payment of the benefits. . .

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

Lists of cited by and citing cases may be incomplete.

Income Tax, Benefits

Leading Case

Updated: 01 November 2021; Ref: scu.521991