Tax analysis: In Mattu, the Upper Tribunal (UT) granted HMRC’s costs application on the grounds of the taxpayer’s unreasonable conduct, noting that there is no requirement for there to be a direct causal link between the costs claimed and the unreasonable conduct.

Tax Analysis: In Spectrum Community Healthcare CIC, the Upper Tribunal (UT) upheld the First-tier Tax Tribunal’s (FTT) decision that the taxpayer's supplies of various healthcare services to prisoners in England were one single composite supply that was exempt from VAT.

Tax analysis: In Holden, the UT held that amounts paid to members of a professional LLP under arrangements described as ‘capital interests’ were not capital receipts. The UT further held that, for later years, the mixed member partnership rules (MMRs) applied to reallocate profits from the corporate member to individual members, overturning the contrary conclusion of the FTT. The UT also upheld HMRC’s procedural positions, including that the LLP had acted carelessly and had done so on behalf of individual members, allowing HMRC to raise late assessments.

Tax analysis: In JPMorgan Chase Bank NA the Upper Tribunal (UT) dismissed the company’s appeal and upheld the First-Tier Tribunal (FTT) decision that the supply of intra-group services was a single composite taxable supply and the VAT exemption for financial services did not apply.

Tax analysis: In Hoopla Animation Ltd, the Upper Tribunal (UT) dismissed the taxpayer’s appeal against the First-tier Tax Tribunal’s (FTT) decision that HMRC were right to refuse authorisation to the taxpayer to issue EIS compliance certificates on the basis there existed ‘disqualifying arrangements’ for the purposes of ITA 2007, s 178A.

Tax analysis: In HMRC v Suterwalla, the Upper Tribunal (UT) dismissed HMRC’s appeal against the decision of the First-tier Tax Tribunal (FTT) that a paddock acquired as part of the purchase of a dwelling did not constitute part of the grounds of the dwelling for the purposes of section 116(1)(b) of the Finance Act 2003.

Tax analysis: In Osmond and Allen v HMRC, the Upper Tribunal (UT) allowed the taxpayers’ appeal that the First-tier Tax Tribunal (FTT) erred in law in concluding that, given the taxpayers’ stated purpose of entering into share buybacks in order to secure enterprise investment scheme (EIS) disposal relief, it necessarily followed that they had a main purpose of obtaining an income tax advantage (within the meaning of section 687 of the Income Tax Act 2007 (ITA 2007)).

Private Client analysis: The First-tier Tribunal (FTT) had previously addressed Mr Campbell’s appeal against HMRC’s assessments and penalties for income tax and Capital Gains Tax (CGT) related to residential property transactions. HMRC contended that Mr. Campbell’s purchase and sale of four properties between 2010 and 2016 constituted a trade, making him liable for income tax or, in the alternative, CGT. The FTT determined that Mr. Campbell was not engaged in a trade and, therefore, not subject to income tax. However, they upheld HMRC’s CGT assessments and penalties. Mr Campbell appealed on the CGT assessment, asserting he was eligible for main residence relief, while HMRC cross-appealed on the income tax issue, arguing that Mr Campbell was indeed trading. Both parties claimed there were errors of law in the FTT’s decisions. While the Upper Tribunal (UT) upheld the FTT’s ruling on the trading matter and dismissed HMRC’s cross-appeal, they identified multiple errors of law in the FTT’s CGT findings. Consequently, the UT set aside the FTT’s decisions on three of the four grounds of Mr. Campbell’s appeal, remitting them for reconsideration by a differently constituted FTT. Notably, the UT’s judgment was highly critical of many aspects of the FTT’s approach. Somewhat surprisingly, this did not extend to the determination that Mr. Campbell’s activities did not constitute a trade, which was not remitted back to the FTT. Written by Ronnie Myers, director at Burges Salmon LLP and Jacob Ashforth, solicitor at Burges Salmon LLP.

Tax analysis: In AML Tax (UK) Ltd, the Upper Tribunal (UT) imposed a penalty of £150,000 on the company under Schedule 36 para 50 to the Finance Act 2008 (FA 2008), for failing to comply with an information notice.

Tax analysis: In HMRC v Ridgway, the Upper Tribunal (UT) allowed HMRC’s appeal against a decision of the First-tier Tax Tribunal (FTT) which had allowed SDLT multiple dwellings relief (MDR).

Tax analysis: In Elphysic Ltd and others v HMRC, the Upper Tribunal (UT) overturned the decision of the First-tier Tax Tribunal (FTT) that HMRC was not entitled to deregister the taxpayers from VAT and dismissed the taxpayers’ cross-appeals against the FTT’s decision that they were not entitled to the VAT flat rate scheme and National Insurance Contributions (NIC) employment allowances.

Tax analysis: In L Rowland & Co (Retail) Limited, the Upper Tribunal (UT) held that the First-tier Tax Tribunal (FTT) had erred in its approach to case management directions concerning further evidence and the summoning of witnesses. The UT concluded that, although the FTT had jurisdiction to issue such directions, it had not exercised its discretion properly, and the taxpayer’s appeal was therefore allowed.