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Articles by Constantine Christofi
HMRC powers and the taxpayer relationship: when is enough, enough?
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Upper Tribunal dismisses taxpayer's appeal in substantial shareholding exemption case
In M Group Holdings Ltd v HMRC [2023] UKUT 213 (TCC), the Upper Tribunal (UT) has upheld the decision of the First-tier Tribunal (FTT), which found that a company was not entitled to benefit from the substantial shareholding exemption (SSE) as the shareholding had only been held for eleven months, as opposed to the required twelve months.
Tax Bites - November 2023
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. News HMRC updates its Employment Status Manual on agency and temporary workers HMRC has updated its guidance on agency and temporary workers in its Employment Status Manual. In particular, HMRC has updated its explanation of supervision, direction or control (SDC) (ESM2055) and provided additional guidance as to how to determine if SDC is present (ESM2055a).
Tax Bites - October 2023
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world.
Tribunal finds in favour of taxpayer confirming that payments are consideration rather than a subsidy for expenditure
In HMRC v Perenco UK Ltd [2023] UKUT 169 (TCC), the Upper Tribunal (UT) held that payments made for goods and services under an arm's-length contract were consideration rather than subsidy for expenditure, even though the payments were calculated to reflect such expenditure. Background On 1 November 2012, Perenco UK Ltd (Perenco) acquired a package of assets from BP.
Court of Appeal confirms no reasonable excuse for non-payment of tax
In William Archer v HMRC [2023] EWCA Civ 626, the Court of Appeal (CoA) held that a taxpayer did not have a reasonable excuse for not paying tax after his case was dismissed by the CoA, notwithstanding that permission to appeal was sought. Background HMRC opened enquiries into Mr Archer's tax returns for tax years 2001/02 and 2002/03. The enquiries concerned the use of two tax avoidance schemes which Mr Archer had implemented.
Tax Bites - August 2023
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. News HMRC issues consultation on transfer pricing, permanent establishment and Diverted Profits Tax HMRC has launched a new consultation requesting views on how to clarify and modernise UK legislation for multi-national enterprises in relation to three areas: Transfer pricing - pricing transactions between related parties.
Tax Bites - July 2023
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. News Umbrella company market consultation HM Treasury has published a summary of responses received in respect of the November 2021 call for evidence on the umbrella company market. The original consultation requested views from stakeholders on the role that umbrella companies play in the labour market and how they interact with tax and employment rights.
Tribunal confirms taxpayer can benefit from HMRC dispensation for employee expenses
In NWM Solutions Ltd v HMRC [2023] UKFTT 364 (TC), the First-tier Tribunal (FTT) held that the taxpayer was able to benefit from a dispensation issued by HMRC in relation to the reimbursement of certain employee expenses. Background NWM Solutions Ltd (NWM) allowed its employees to expense costs incurred on food and drink when working past 8pm or while "travelling in the performance of duties of the employment".
Tax Bites - June 2023
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. News UK rules implementing the Common Reporting Standard extended Regulations have been made to extend the International Tax Compliance Regulations 2015 (SI 2015/878) (the Compliance Regulations). The Compliance Regulations require UK financial institutions to report information on certain non-UK account holders to HMRC.
Tribunal finds HMRC's discovery assessment to be invalid
In Robson v HMRC [2023] UKFTT 226 (TC), the First-Tier Tribunal (FTT) allowed the taxpayer's appeal against HMRC's discovery assessment as it had not been validly raised. Background Mr Robert Robson had a varying pay structure and bonus scheme which meant that he had, at times, overpaid tax and become entitled to a tax rebate.
Tax Tribunal allows appeal and confirms interim dividend was not "due and payable"
In Peter Gould v HMRC [2022] TC08647, the First-tier Tribunal (FTT) allowed the taxpayer's appeal and found that an interim dividend paid to two shareholders on different dates was taxable on the dates of payment, not the earlier date of declaration, resulting in the dividend being taxed in different tax years for each shareholder. Background This case concerned the payment of an interim dividend by Regis Group (Holdings) Ltd (Regis).
Couldn’t careless? Reasonable care and the role of professional advisers
Whilst taking professional advice will usually mean a taxpayer has taken reasonable care, not taking advice does not necessarily mean a taxpayer has been careless. Speedread The former Chancellor, Nadim Zahawi, agreed that he had been 'careless' in the completion of his tax return for 2017/18, allegedly in relation to a CGT liability connected to the disposal of shares in his former company, YouGov.
Tribunal confirms it has jurisdiction to consider an argument of abuse of process based on excessive delay on the part of HMRC
In Clive Kingdon & Ors v HMRC [2022] UKFTT 407 (TC), the First-tier Tribunal (FTT) allowed the taxpayers' appeals against discovery determinations and penalties on the basis that a company acquired a partnership business earlier than HMRC considered to be the case. Background This case concerned income tax. In 1993, Clive Kingdon, Terry Stead and Anne Kingdom (the Appellants) established a partnership named Rota Rod (the Partnership).
Payments under indemnity not a remittance
In Sehgal & Anor v HMRC [2022] UKFTT 312 (TC), the First-tier Tribunal (FTT) held that arrangements under which the taxpayers settled a debt indemnity arising from a share sale did not give rise to a remittance to the UK, under section 809L, Income Tax Act 2007 (ITA 2007).
Tribunal considers salaried member rules and allows taxpayer's appeal in part
In Bluecrest Capital Management (UK) LLP v HMRC [2022] UKFTT 204, the First-tier Tribunal (FTT) considered, for the first time, the salaried member rules in section 863A-G, Income Tax (Trading and Other Income) Act 2005 and in allowing the taxpayer's appeal in part, concluded that Condition A (disguised salary) was met in relation to all members, but that Condition B (significant influence) was only met for certain categories of members.
Tribunal allows taxpayer's appeal and confirms its holding in another company constituted a "structural asset"
In Guardian Assurance Ltd v HMRC [2022] UKFTT 234 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against HMRC's decision that its majority stake in another insurance company was not a "structural asset" for the purposes of section 137, Finance Act 2012 (FA 2012). Background Guardian Assurance Ltd (Guardian) is a principal life insurance company. In 1980, it acquired a 74% shareholding in Montreal Life Insurance Company (Montreal), a Canadian life insurance company.
Valuing leasehold interests in trade-related properties using profits method does not involve disaggregation of property value and "transferable goodwill"
In HMRC v Denning and others [2022] EWCA Civ 909, the Court of Appeal held that there should be no disaggregation of property value and "transferable goodwill" where valuations had been assessed using the profits method of valuation. Background Dr Zyrieda Denning (Dr Denning) had acquired the business and freehold interests in two care homes. She subsequently incorporated three companies: Jasmine Care Holdings Ltd (JCH); MH Hants Ltd (MHL); and MP Hants Ltd (MPL).
The Medical Defence Union - Insurance premium rebates not taxable receipts
United Kingdom December 15 2021 In The Medical Defence Union Ltd v HMRC [2021] UKUT 249 (TCC), the Upper Tribunal (UT) has held that adjustments to an insurance premium were not taxable, as the refunds were mere adjustments to member contributions. Background The Medical Defence Union Ltd (MDU) provided certain benefits to medical professionals, such as indemnity cover against professional negligence claims, which were paid for by a mutual fund.
Tax Bites - December 2021
United Kingdom December 2 2021 Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.
Crippin - ancillary dwelling qualified for principal private residence relief
United Kingdom November 24 2021 In Roger Crippin v HMRC [2021] UKFTT 0351 (TC), the First-tier Tribunal (FTT) held that a three-bedroom annex to a main property qualified for principal private residence (PPR) relief. Background Roger Crippin (the Appellant) purchased his home and an annex in one transaction. He converted the annex into a flat with three bedrooms. The flat was capable of being a separate dwelling and had a separate entrance.
Fashion On The Block – Taxpayer Successful With Substance Over Form Argument - Corporate/Commercial Law - UK
Reynolds Porter Chamberlain Most Read: Contributor UK, May 2021 UK: Fashion On The Block – Taxpayer Successful With Substance Over Form Argument 11 November 2021 Reynolds Porter Chamberlain To print this article, all you need is to be registered or login on Mondaq.com.
Golamreza - HMRC assessments and the burden of proof
In Golamreza Qolaminejite (aka A Cooper) v HMRC [2021] UKUT 118 (TCC), the Upper Tribunal (UT) allowed the taxpayer's appeal in part on the basis that the First-tier Tribunal (FTT) had erred in law in failing to take all of the taxpayer's case into account in arriving at its decision. Background Golamreza Qolaminejite (the taxpayer) arrived in the UK in 1996 from Iran, where he had inherited valuable assets. He had a background and interest in ships, aircraft and engineering.
Tax Bites - July 2021 - Tax - UK
Reynolds Porter Chamberlain Most Read: Contributor UK, May 2021 To print this article, all you need is to be registered or login on Mondaq.com. Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.
Rediscovering ADR - Tax - UK
To print this article, all you need is to be registered or login on Mondaq.com. Alternative Dispute Resolution (ADR), in the form of mediation, remains an important part of the tax dispute resolution process. In light of the backlog of cases caused by Covid-19, and the practice statement issued by the Tribunal last year, we expect that taxpayers and HMRC will begin to re-examine and embrace ADR which can be an effective method of resolving disputes with HMRC.
Tax Bites - June 2021 - Tax - UK
Reynolds Porter Chamberlain Most Read: Contributor UK, May 2021 To print this article, all you need is to be registered or login on Mondaq.com. Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.
Mehrban - Discovery Assessments Invalid Due To Staleness - Litigation, Mediation & Arbitration - UK
Reynolds Porter Chamberlain UK: Mehrban – Discovery Assessments Invalid Due To Staleness 12 May 2021 Reynolds Porter Chamberlain To print this article, all you need is to be registered or login on Mondaq.com.
Mehrban - Discovery assessments invalid due to staleness | Lexology
In Kashif Mehrban v HMRC [2021] UKFTT 53 (TC) the First-tier Tribunal (FTT) held that a three-year delay in issuing a 'discovery' assessment issued pursuant to section 29,Taxes Management Act 1970 (TMA), resulted in the discovery becoming 'stale', even though the delay had not been the result of HMRC inaction.
Tax Bites - May 2021 - Tax - UK
Reynolds Porter Chamberlain UK: Tax Bites - May 2021 10 May 2021 by Adam Craggs and Constantine Christofi Reynolds Porter Chamberlain To print this article, all you need is to be registered or login on Mondaq.com. Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world. As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.
Outram – Tribunal Prevents HMRC From Relying On New Argument - Litigation, Mediation & Arbitration - UK
Reynolds Porter Chamberlain UK: Outram – Tribunal Prevents HMRC From Relying On New Argument 14 April 2021 Reynolds Porter Chamberlain To print this article, all you need is to be registered or login on Mondaq.com. In Outram and another v HMRC [2021] UKFTT 29 (TC) the First-tier Tribunal (FTT) prevented HMRC from relying on a new argument contained in its skeleton argument which had not been included in its statement of case.
Outram - Tribunal prevents HMRC from relying on new argument | Lexology
United Kingdom April 14 2021 In Outram and another v HMRC [2021] UKFTT 29 (TC) the First-tier Tribunal (FTT) prevented HMRC from relying on a new argument contained in its skeleton argument which had not been included in its statement of case. Background This was a case management decision relating to appeals by two taxpayers, Anthony and Ross Outram (the Applicants) concerning their participation in a Montpelier tax mitigation arrangement (the Scheme).
Embiricos: HMRC cannot issue a partial closure notice without specifying the amount of tax due | Lexology
United Kingdom February 17 2021 In HMRC v Embiricos [2020] UKUT 370 (TCC), the Upper Tribunal (UT), in allowing HMRC's appeal, has held that HMRC cannot issue a partial closure notice without specifying how much tax is due. Background Mr Epaminondas Embiricos (the taxpayer), filed tax returns for the years 2014/15 and 2015/16.
Project Blue (No 2): HMRC must refund overpaid SDLT | Lexology
United Kingdom January 20 2021 In Project Blue Ltd v HMRC [2020] UKFTT 475 (TC), the First-tier Tribunal (FTT) has held that the taxpayer was entitled to repayment of SDLT, as part of the consideration for the property in question was contingent, within the meaning of section 51, Finance Act 2003 (FA 2003) and was never paid. Background This appeal concerned the sale of Chelsea Barracks in London (the Property).
McCabe: HMRC not required to disclose documents relating to discussions with the Belgian tax authority | Lexology
OECD, United Kingdom
December 16 2020 In Kevin McCabe v HMRC [2020] UKUT 266 (TC), the Upper Tribunal (UT) has held that the First-tier Tribunal (FTT) was correct not to order HMRC to disclose documents relating to discussions it had had with the Belgian tax authority, as the documents had no probative value and the tax authorities had raised confidentiality issues.
RT Rate: Legitimate expectation rights not engaged | Lexology
United Kingdom
December 9 2020 In RT Rate Ltd and Others v HMRC [2020] UKFTT 392 (TC), the First-tier Tribunal (FTT) has held that it does not have jurisdiction to consider claims for repayment of VAT based on the EU law principle of legitimate expectation. Background In 2003, the appellant motor traders made claims for repayment of overpaid output tax on supplies of demonstrator vehicles under section 80, VATA 1994.
Cheshire Centre - HMRC ordered to pay taxpayer's costs due to its unreasonable behaviour | Lexology
United Kingdom
November 18 2020 In HMRC v Cheshire Centre for Independent Living [2020] UKUT 275 (TCC), the Upper Tribunal (UT) ordered HMRC to pay the taxpayer's costs even though HMRC had been successful, as it had acted unreasonably in introducing a new ground of appeal. Background The Cheshire Centre for Independent Living (CCIL) was a charity which promoted the independent living of disabled persons. A VAT dispute arose with HMRC and CCIL appealed to the First-tier Tribunal (FTT).
RBS - HMRC's application for specific disclosure refused | Lexology
In Royal Bank of Scotland Group Plc v HMRC [2020] UKFTT 321 (TC), the First-tier Tribunal (FTT) refused an application by HMRC for a direction requiring the taxpayer to provide specific disclosure. Background HMRC refused a claim by the Royal Bank of Scotland Group Plc (RBS) to deduct input tax in relation to 536 trades in VAT periods 06/09 and 09/09 of carbon credits under the EU Emissions Trading System.
Ahmed - HMRC cannot 'refresh' penalty time limit by reissuing information notices | Lexology
United Kingdom
September 23 2020 In Salim Ahmed v HMRC [2020] UKFTT 337 (TC), the First-tier Tribunal (FTT) allowed the taxpayer’s appeal against a penalty for failing to comply with an information notice because the penalty notice was not issued within 12 months of the taxpayer becoming liable to a penalty and HMRC could not refresh the time period by issuing a subsequent information notice which merely repeated earlier information notices.
Michael Vaughan - High Court declines to rectify contract to prevent tax charge | Lexology
In (1) MV Promotions Ltd (2) Michael Vaughan v (1) Telegraph Media Group Ltd (2) HMRC [2020] EWHC 1357 (Ch), the High Court declined to exercise its discretion to rectify a provision in a contract for services. Background This claim was brought by former England cricket captain and sports pundit, Michael Vaughan and MV Promotions Ltd (MVP), the company through which he provided his services (together, the Claimants).
Royal Bank of Canada - Canadian bank liable to pay UK tax on assigned oil royalties | Lexology
In Royal Bank of Canada v HMRC [2020] UKFTT 267 (TC) the First-tier Tribunal (FTT) held that a Canadian bank was subject to UK tax on royalties assigned to it following its oil company creditor entering receivership. Background Royal Bank of Canada (RBC) loaned $540 million in the early 1980s to Sulpetro Ltd (Sulpetro), a Canadian oil company, to fund exploration in the UK continental shelf.
Sheiling - Belief in procedural invalidity of APN can constitute reasonable excuse | Lexology
In Sheiling Properties Ltd v HMRC [2020] UKUT 175 (TCC), the Upper Tribunal (UT), in dismissing an appeal against penalties for non-payment of accelerated payment notices (APNs), confirmed that a reasonable belief that the APNs were invalid could constitute a reasonable excuse for non-payment.
Bella Figura - Unauthorised payment charge set aside | Lexology
In HMRC v Bella Figura [2020] UKUT, the Upper Tribunal (UT) held that a scheme sanction charge stood as a valid assessment and partially allowed the taxpayer's cross-appeal, setting aside HMRC's assessments of an unauthorised payments charge and surcharge as being out of time. This blog is based on an article first published in Taxation on 9 June 2020. A copy of the article can be found here.
Sippchoice - Allowable contributions to a SIPP are restricted to payments of money | Lexology
In HMRC v Sippchoice Ltd [2020] UKUT 0149 (TCC), the Upper Tribunal (UT) has allowed HMRC’s appeal and confirmed that 'contributions paid' to a SIPP are restricted to contributions of money and do not encompass transfers of non-monetary assets. Background HMRC refused a claim for relief at source (RAS) from income tax made by Sippchoice Ltd (Sippchoice), in relation to contributions to a self-invested personal pension scheme (SIPP) administered by Sippchoice.
Looney - Termination payments were trading receipts | Lexology
In Kieran Looney & Anor v HMRC [2020] UKUT 0119 (TCC), the Upper Tribunal (UT) has dismissed an appeal against the First-tier Tribunal's (FTT) decision that a termination payment and other payments made under a contract entered into by a partnership to provide management training, were trading receipts of a partnership. Background Mr Kieran Looney was the nominated partner of Kieran Looney & Associates (KLA) (together the taxpayers). KLA provided leadership training and business coaching.
Coyle - Upper Tribunal refuses permission to appeal out of time | Lexology
In Michael Coyle t/a Coyle Transport v HMRC [2020] UKUT 0113 (TCC), the Upper Tribunal (UT) set aside the decision of the First-tier Tribunal (FTT) for errors of law, but reached the same conclusion as the FTT and refused the taxpayer permission to appeal out of time. Background On 12 December 2012, HMRC seized a lorry (vehicle registration PHZ6358) and its load of beer.
MXC Dunlin - Interest due on repayments of tax paid in the 1980s | Lexology
United Kingdom
February 26 2020 In MCX Dunlin (UK) Ltd v HMRC [2020] EWHC 11 (Ch), the High Court has held that interest was due on repayments of liabilities to petroleum revenue tax (PRT) dating from the 1980s, which had been met by crediting advance PRT (APRT). Background In the 1980s, Shell UK Ltd and Esso Exploration and Production Ltd (the old participators) operated the Dunlin oil field in Scotland (the oil field). Profit they made was assessable to PRT, which was paid to HMRC.
How to handle tax appeals
How to handle tax appeals 25 February 2020 A 20 questions guide, by Adam Craggs and Constantine Christofi (RPC). 1. Do I have an appealable decision? There are numerous decisions from HMRC which carry a right of appeal. The most common decisions which can be appealed include the following: (i) a conclusion stated or amendment made by an enquiry closure notice... If you are not a subscriber, subscribe now to read this content.
Devon Waste Management - Waste firms win appeal in landfill 'fluff' case | Lexology
In Devon Waste Management Ltd and Others v HMRC [2020] UKUT 1 (TCC), the Upper Tribunal (UT) has held that the disposal of certain waste materials did not attract a charge to landfill tax. Background The appellants operate in the field of waste management and disposal. In so far as they dispose of materials as waste by way of landfill at landfill sites, they are liable to pay landfill tax. Landfill tax was introduced by Finance Act 1996 (FA 1996).
Lloyd-Webber - capital gains losses allowed over properties which were never completed | Lexology
In Lloyd-Webber and another v HMRC [2019] UKFTT 717 (TC), the First-tier Tribunal (FTT) has held that a payment made under a contract for the acquisition of land was for the acquisition of contractual rights, rather than for the land, giving rise to an allowable loss on termination of the contract. Background At all material times, Lord and Lady Lloyd-Webber (the taxpayers) were UK tax resident and domiciled in England.
Jafari - HMRC criticised for breach of its duty to assist the Tribunal | Lexology
In Jafari v HMRC [2019] UKFTT 692 (TC), the First-tier Tribunal (FTT) has criticised HMRC for failing in its duty to bring relevant authorities to its attention.
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