Tax analysis: In Michael Kelly v HMRC, the First-tier Tax Tribunal (FTT) struck out the taxpayer’s appeal due to lack of jurisdiction, holding that an individual partner has no right of appeal against amendments to his personal self-assessment return following adjustments to the partnership return. HMRC’s assessments on the partner stood, even though the tax charged could be incorrect.

Tax analysis: In Delaney v HMRC, the First-tier Tax Tribunal (FTT) held that the preparatory steps taken by the taxpayer’s close company ahead of acquiring the taxpayer’s business were not sufficient to evidence a contract had been made, resulting in the taxpayer being unable to claim entrepreneurs’ relief (as it then was) on the business disposal.

Tax analysis: In Keighley, the First-tier Tax Tribunal (FTT) considered various issues arising from an enquiry into the corporation tax return of a company. The main issues were the payment of personal expenses of a shareholder by the company and the tax treatment of the write- off of a loan made by the company.

Tax analysis: In Jumpman Gaming Ltd, the First-tier Tax Tribunal (FTT) held that remote gaming duty (RGD) was not due on an initial promotional spin offered to new customers but was due on subsequent free spins.

Tax analysis: In Cats North Sea Ltd v HMRC, the First-tier Tax Tribunal (FTT) was called on to address the complex interaction of the statutory codes dealing with oil-related activities, transfers of a trade without a change of ownership and the capital allowance code provisions concerning disposal events. The issue arose because although the transferor company was transferring part of one trade the transferee was treated as carrying on two trades. This raised difficult questions as to the interaction of different deeming provisions to a situation not contemplated by the legislation. The FTT held that although the transferee company succeeded to the trade of the transferor for one set of statutory provisions it carried on a different trade for the purposes of another, and therefore triggered a substantial balancing charge for capital allowances purposes. Written by Rory Mullan KC, barrister at Old Square Tax Chambers.

Tax analysis: Mr Wardle claimed Entrepreneur’s Relief (ER) in respect of a disposal of an interest he held in a business on 28 February 2020. If successful, a lower rate of capital gains tax (10%) would apply to the disposal. HMRC sought to deny this claim. The business was a waste-to-energy project located at Port Hull, which was structured through a partnership vehicle in which Mr Wardle held an interest. The First-tier Tax Tribunal (FTT) was required to determine when, if at all, the business was conducted on a commercial basis with a view to the realisation of profit. Judge Newstead Taylor held that the FTT was bound to apply the test articulated in Mansell v R&C Commrs [2006] Sp C 551 (Mansell) with respect to when a trade has commenced and the extent to which a trade must be set up prior to commencement. In applying Mansell, the FTT held that the set-up of a trade did not require ‘full, 100% completion’, and the extent to which a trade needs to be set up is a fact sensitive analysis and it would likely vary depending on the business in question. Written by Jemima Guelfi, associate, and Mark Bevington, principal, at ADE Tax.

Tax analysis: In 3D Crowd CIC, the First-tier Tax Tribunal (FTT) found that a business could only recover some of its input tax, as the input tax that related to the giving away of free personal protective equipment (PPE) during the pandemic was not directly linked to a taxable supply.

Tax analysis: In CATS North Sea Ltd, the First-tier Tax Tribunal (FTT) considered the interaction between the corporation tax oil and gas ring fence provisions, the transfer of trade without change of ownership provisions at Chapter 1, Part 22 of the Corporation Tax Act 2010 (CTA 2010) (the ‘transfer of trade provisions’) and capital allowance provisions relating to disposal events at section 61 of the Capital Allowances Act 2001 (CAA 2001) in the context of a hive-down of an oil and gas pipeline.

Tax analysis: In Stenhouse and another v HMRC and Abbey Healthcare (East Kilbride) Ltd and others v HMRC, the First-tier Tax Tribunal (FTT) allowed late appeal applications by the taxpayers against discovery assessments and closure notices, highlighting weaknesses in HMRC’s approach.

Tax analysis: In Elphysic, the First-tier Tax Tribunal (FTT) allowed, in part, appeals by four companies (the Lead Appellants). The one part that was allowed related to a decision by HMRC to cancel the VAT registration numbers of the companies and it was allowed because it was accepted by all concerned that the directors were not knowingly involved in any fraud. The two parts of the appeal that were dismissed related to whether the companies were entitled to (a) use the flat rate scheme (FRS) for small businesses and (b) claim employment allowance to reduce the amounts of employer National Insurance contributions (NICs) due.

Tax analysis: In Osmond v HMRC, the First-tier Tax Tribunal (FTT) dismissed the taxpayers’ appeals concerning share buybacks that were intended to crystallise capital gains tax (CGT) relief under the Enterprise Investment Scheme (EIS), deciding that in law they had a main purpose of obtaining an income tax advantage under the transactions in securities (TIS) anti-avoidance provisions.

Tax analysis: In NHS Mid & South Essex ICB and others, the First-tier Tax Tribunal (FTT) decided that an element of the NHS continuing healthcare (CHC) redress payments constituted interest for the purposes of section 874 of the Income Tax Act 2007 (ITA 2007) and, furthermore, that the interest constituted yearly interest or was treated as yearly interest under ITA 2007, s 874(5A) since the interest was payable to individuals in respect of compensation.