This podcast discusses the United Kingdom Supreme Court judgment detailing an appeal between HMRC and several Limited Liability Partnerships (LLPs) regarding a contested tax-avoidance scheme. The core dispute centered on whether the LLPs were entitled to claim First Year Allowances for capital expenditure on software rights, where 75% of the supposed purchase price was financed via complex, interest-free, non-recourse loans that immediately recycled funds through a pre-ordained banking loop. This raised the critical expenditure issue: whether the LLPs genuinely incurred the full cost of the software when the majority of the money did not reach the vendor for the purpose of acquisition. Furthermore, the court considered a procedural issue concerning the proper scope of a taxpayer appeal following an uninformative closure notice issued by HMRC during the investigation process. The Supreme Court ultimately ruled in favor of HMRC on the expenditure issue, limiting the qualifying allowances to the 25% cash component, while also dismissing the LLPs' cross-appeal on the procedural point.

HMRC v Tower MCashback LLP 1 and another [2011] UKSC 19

This podcast discusses a UK Supreme Court judgment resolving a major tax dispute between Scottish Widows plc (the Company) and HMRC following the Company's demutualisation in 2000. The central issue concerned whether substantial amounts recorded as "transfers from Capital Reserve" by the Company should be treated as chargeable receipts, effectively nullifying the Company’s claimed trading losses. This required detailed interpretation of Section 83(2) of the Finance Act 1989, which governs the calculation of profits and losses for life assurance businesses. The court considered whether an increase in asset value for tax computation must align with real market value increases or must be determined by the value as brought into account in the official regulatory forms (Form 40). The Supreme Court unanimously allowed HMRC’s cross-appeal, holding that the tax computation is legally bound to the figures entered in the regulatory accounts, regardless of whether those figures reflected commercial reality.

Scottish Widows plc v HMRC [2011] UKSC 32

This podcast discusses a UK Supreme Court judgment concerning tax residence claims brought against HMRC by individual taxpayers who sought to avoid UK tax liability. The central issue addresses whether the taxpayers had a legitimate expectation that HMRC's published guidance, known as booklet IR20, superseded the complex common law requirement that an individual must effect a "distinct break" from the pattern of their UK life to achieve non-resident status. The appellants argued that IR20 offered a simplified, alternative test focused primarily on specific day-count limits for return visits to the UK. However, the majority ruled that the guidance, when read comprehensively, was too unclear to create a binding assurance that such a distinct break was unnecessary, thereby upholding the need for a multi-factorial evaluation of the taxpayers' circumstances. The court also rejected the subsidiary claim that HMRC had an unannounced, alternative settled practice that favored the taxpayers' position.

Davies & Anor, R (on the application of) v HMRC [2011] UKSC 47

This podcast discusses the UK Supreme Court appeal in Grays Timber Products Limited v HMRC, revolving around the tax classification of a substantial payment made to managing director Mr. Alexander Gibson upon the sale of his company shares. The central issue was whether the excess consideration Mr. Gibson received should be treated as a chargeable gain subject to capital gains tax, as the company contended, or as taxable employment income under the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). The resolution required the court to interpret the statutory definition of “market value” for employment-related securities under Chapter 3D of ITEPA 2003, specifically addressing whether personal contractual rights should be factored into the shares' value. The court ultimately determined that the enhanced sum was a reward for Mr. Gibson's personal services, rather than an intrinsic value attached to the shares themselves, confirming the tax authority’s claim that the payment was taxable as employment income. The concurring opinions also expressed frustration with the complex and poorly drafted anti-avoidance legislation contained within Part 7 of ITEPA 2003.

Grays Timber Products Limited v HMRC [2010] UKSC 4

This podcast discusses an appeal by HMRC against Mr. Michael Holland, who was accused of misfeasance regarding 42 insolvent companies after a complex tax avoidance structure failed, resulting in substantial Higher Rate Corporation Tax (HRCT) liabilities. The central legal dispute hinges on whether Mr. Holland was a de facto director of these composite companies, which would hold him personally liable for over £3.5 million in unlawful dividend payments. This determination is complicated because the companies’ sole, formal director was a corporate director controlled by Mr. Holland. The majority judges dismissed HMRC’s appeal, concluding that because Mr. Holland’s actions were entirely confined to his duties as a director of the corporate entity, he did not assume the fiduciary responsibilities of the underlying companies. However, a significant dissent argued that this reliance on the formal corporate structure ignores the fact that Mr. Holland was indisputably the guiding mind and sole decision-maker, and therefore should be held accountable.

Holland v HMRC [2010] UKSC 51

This podcast discusses a UK Supreme Court judgment concerning a long-running dispute between HMRC and DCC Holdings (UK) Limited. The core issue involves determining the correct taxation of certain sale and repurchase agreements, known as repos, for the 2001-2002 accounting period. This requires complex interpretation of interlocking legislation, including provisions from the Income and Corporation Taxes Act 1988 and the Finance Act 1996, which introduced new rules for loan relationships and authorized accounting methods. The judges struggled to achieve a logical and symmetrical result for calculating the company’s taxable interest and corresponding non-trading deficit from these deemed financial relationships. Ultimately, the court found that the mandated accruals basis requires both the hypothetical credit and the corresponding debit to be calculated using a proportional, time-apportioned sum, thus establishing commercial sanity in the tax treatment of the repos.

HMRC v DCC Holdings (UK) Ltd [2010] UKSC 58

This podcast discusses the UK First-Tier Tribunal dismissing the appeal of Georgios Kamperis against follower notice penalties imposed by HMRC. These penalties resulted from Kamperis's failure to take legally required corrective action after the Montpelier tax avoidance scheme in which he participated was decisively defeated in the Huitson judicial ruling. Kamperis argued that his non-compliance was reasonable in all the circumstances due to perceived administrative failures by HMRC and his belief that paying related Accelerated Payment Notices (APNs) resolved the underlying tax dispute. However, the Tribunal confirmed that the penalties were correctly issued because paying APNs does not equate to taking corrective action, which specifically required him to relinquish his claim to the denied tax advantage. Ultimately, the Tribunal concluded that Kamperis failed to demonstrate that his inaction was objectively reasonable, upholding the reduced penalty amount of £39,153.22.

Georgios Kamperis v HMRC [2025] UKFTT 1441 (TC)

This podcast discusses the First-Tier Tribunal Tax Chamber concerning a dispute between County Insurance Services Limited and HMRC over corporation tax assessments. The central legal issue was whether the business acquired by the company in 2013 was carried on by its predecessor partnership prior to 1 April 2002, which would determine if the associated goodwill qualified for amortisation deductions. County Insurance argued that a fundamental restructuring in 2006, marked by the disposal of its IFA arm and a shift from a retail high street location to a wholesale brokerage model, constituted the cessation of the old trade and the start of a new one after the deadline. However, the Tribunal determined that the changes in clientele, services, and location were not a "sudden and dramatic" transformation, but rather organic developments of the existing trade. Since the business was found to have been continuous since before the 2002 cutoff date, the related goodwill was disqualified from the Intangible Fixed Assets regime, resulting in the dismissal of the company’s appeal.

County Insurance Services Limited v HMRC [2025] UKFTT 1440 (TC)

This podcast discusses the findings of a preliminary hearing in the case brought by Intech Ventures Limited and director Michael Stefan Duma against HMRC. This procedural hearing was required because the appellants contested an HMRC Notice of Requirement (NOR) demanding security for outstanding Pay As You Earn (PAYE) and National Insurance Contributions (NICs) debts. The central issue before Judge Brooks was whether the appeal was brought within the mandatory 30-day statutory time limit. The Tribunal found that the appeals were submitted 214 days late, a delay characterized as significant and serious. After rejecting Mr. Duma’s arguments regarding confusion over the process or estoppel by convention, the court concluded that no good reason was presented to override the time limits. Therefore, the Tribunal refused permission for either Intech Ventures Limited or Michael Stefan Duma to proceed with their appeals out of time.

Intech Ventures Limited (in liquidation) & Anor v HMRC [2025] UKFTT 1444 (TC)

This podcast discusses the First-tier Tribunal in the case of Steven Hall against HMRC, concerning the disputed compulsory VAT registration of Mr. Hall for a lengthy period stretching from 2011 to 2022. Mr. Hall argued the registration was invalid because, crucially, a related income tax self-assessment enquiry had already been concluded with no adjustments, a position contradicted by the subsequent VAT assessment. Although HMRC contended that the letter confirming the income tax closure was issued in error and was premature, both parties agreed that income tax and VAT findings must align based on HMRC guidance. The Tribunal rejected HMRC’s assertion of error, ruling that the letter confirming no additional tax was due constituted an irrevocable closure notice under the Taxes Management Act. Consequently, the Tribunal found that the VAT registration decision was incorrect because the established closure of the income tax enquiry precluded a contradictory VAT assessment, thereby allowing Mr. Hall's appeal.

New tracks tagged #HMRC