Owner-Managed Businesses

Weekly case highlights ― 10 January 2022

Produced by Tolley
  • 19 Jan 2022 14:01

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Weekly case highlights ― 10 January 2022
  • Business tax
  • TR and Others v HMRC
  • Employment tax
  • Dorothy Johnson v HMRC
  • Christine Bradley v HMRC
  • Capital gains tax
  • Christopher Thomson v HMRC
  • VAT
  • Hotel La Tour Ltd v HMRC
  • More...

Weekly case highlights ― 10 January 2022

These are our brief notes and thoughts on cases published in the last week or so which caught our eye and are likely to be of particular interest to tax practitioners. Full case reports and commentary on most of these cases will be included within our normal reference sources in the coming weeks.

Business tax

TR and Others v HMRC

It is a fundamental feature of the tax system that for a business expense to be tax deductible it has to be incurred wholly and exclusively for the purpose of the trade. If there is another purpose ― such as a personal benefit to the individual incurring the expense ― it will not be allowable. This case is a good example of how well-constructed arguments and compelling evidence can result in a deduction being obtained where at first sight it seems unlikely.

The taxpayers here ran a scrap metal business. Criminal charges were brought against two of the partners and a number of employees on the grounds that the business was dealing with stolen property. One of the partners was acquitted at the trial ― the other was found guilty on one count but had the conviction overturned on appeal. The partnership claimed a deduction in its account for the legal fees of £600K incurred in defending the case. HMRC argued that the expenditure had a dual purpose ― there was a benefit to the trade but also the purpose of defending the personal reputations of the

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