No re-opening after closure notices
The taxpayer had purchased software licences (SLA), and set out to claim the full cost against its tax liabiilities under the 2001 Act in the first year. The taxpayer said that after the Revenue had issued closure notices, it was not able to re-open the assessments for the year in question. The taxpayer appealed against the decision to allow the revenue to reopen the assessments, and the revenue appealed against allowing the claim of the full cost in the first year.
Held: The Revenue’s appeal was allowed, and that of the taxpayer rejected. HMRC had been free to advance alternative arguments on the expenditure issue. All of the consideration provided for in the SLA was not expenditure incurred on the provision of software. The closure notices were to be amended to allow only 25% of the first year allowances claimed.
Judges:
Lord Hope, Deputy President, Lord Rodger, Lord Walker, Lord Collins, Lord Kerr, Lord Clarke, Lord Dyson
Citations:
[2011] UKSC 19, UKSC 2010/0041, [2011] 3 All ER 171, [2011] STC 1143, [2011] STI 1620, [2011] BTC 294, [2011] 2 WLR 1131, [2011] 2 AC 457
Links:
Bailii, Bailii Summary, SC Summary, SC
Statutes:
Capital Allowances Act 2001 45, Taxes Management Act 1970 28B, Income and Corporation Taxes Act 1988 118ZA
Jurisdiction:
England and Wales
Citing:
At SCIT – Tower MCashback Llp1 and Llp2 v Revenue and Customs SCIT 19-Jul-2007
SCIT Capital expenditure on software – whether HMRC can raise additional contentions in an appeal beyond those indicated in the Closure Notice – whether expenditure was incurred pursuant to an unconditional . .
At ChD – Tower Mcashback Llp and Another v HM Revenue and Customs ChD 13-Oct-2008
The court considered the availablilty of a first year allowance for the full first year expenditure on software licence agreements. The revenue sought to bring new points on appeal.
Held: The LLPs’ appeals on the procedural issue as to the . .
At CA – Revenue and Customs v Tower MCashback Llp 1 and Another CA 2-Feb-2010
The taxpayer had sought to set off the entire cost of software licences against tax in the year of purchase, and challenged the re-opening of tax assessments after their closure by the Revenue. The Revenue appealed.
Held: The Revenue could . .
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 . .
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.
Income Tax, Taxes Management
Updated: 09 December 2022; Ref: scu.439647