Weekly case highlights ― 7 June 2021

Produced by Tolley
Weekly case highlights ― 7 June 2021

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

  • Weekly case highlights ― 7 June 2021
  • Business tax
  • West Burton Property Ltd v HMRC
  • Corporation tax
  • WT Banks & Co (Farming) Ltd v HMRC
  • Employment tax
  • E ON UK plc v HMRC
  • Chalcot Training Ltd v Ralph and another; Chalcot Training Ltd v Stoneman and another
  • VAT
  • Blaenau Bach Farm v HMRC
  • More...

Weekly case highlights ― 7 June 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

West Burton Property Ltd v HMRC

This is acase about the interaction of accounting principles with the computation of tax liabilities. The dispute was essentially about what happens when revenue expenditure, which has been deferred in the balance sheet and is being amortised over anumber of years, is charged to the profit and loss account when the asset to which it relates is sold. The details are not important, but all involved in corporate tax should study this judgement because of its very careful analysis of how accounting standards should be interpreted in the context of atax dispute. The judge preferred the taxpayer’s analysis. For much of the decision, his analysis is balanced and measured but in his closing remarks, he suddenly let us rip. Finally, to conclude the above is entirely compatible with the system for calculating the taxable profits of atrade which has operated in the UK for many years. In contrast, were the submissions of [HMRC] in this appeal to succeed, that would drive acoach and horses through that system and render it incapable of functioning effectively and appropriately. Considering HMRC’s position, in this case, it is not only unsound as amatter of law but would, if adopted, give rise to an unfair result for the appellant and cause potentially significant upheaval in relation to this aspect of the UK taxation regime more generally.

Corporation tax

WT Banks & Co (Farming) Ltd v HMRC

Business deals are often agreed on ahandshake. This can work well, but where arelationship breaks down, the lack of awritten agreement can

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