Weekly case highlights ― 18 October 2021

Produced by Tolley

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

  • Weekly case highlights ― 18 October 2021
  • Business tax
  • The Medical Defence Union Ltd v HMRC
  • Bass & Another v Buchanan
  • European law
  • HMRC v Ampleaward Ltd
  • Tax administration
  • Mark Mitchell and Another v HMRC

Weekly case highlights ― 18 October 2021

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

The Medical Defence Union Ltd v HMRC

A person cannot trade with themselves. That seems obvious. But can the principle apply to a group of people? Case law has long established that the answer is yes. A landmark 1931 judgment explained the concept: ‘a certain class of people are associating together to put up money to achieve an object for each other and divide what is not wanted among themselves in that character, namely in the character of the persons who put it up’. Profits or surpluses arising from this sort of purely mutual trading are not taxable.

Applying the principle in practice is however much more difficult, as this case shows. It is concerned with the insurance arrangements put in place for doctors by the Medical Defence Union, and whether or not the mutual trading exemption applied to certain flows of money between the Union and the insurance company providing the cover. The details are not relevant and, without an extensive knowledge of the way that the insurance industry operates, are hard to understand, but what matters is the discussion

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