Accounting standards and taxable profit: In Hart St Maltings Ltd v HMRC [2023] UKFTT 860 (TC) (12 October 2023) a company was a small property developer that had purchased a building for conversion into two separate properties and at the end of the accounting period had sold one of them. However in its accounts it included all of the costs of developing both properties without carrying the costs of developing the second property forward as work in progress. In effect it was accounting on a cash basis. HMRC issued assessments calculating profits on an accruals basis. The FTT struck out the company’s appeal against the assessments on the basis that it had no reasonable prospect of success as the law was clear that cash accounting was not available to the company. There is nothing new in this decision but it is a useful reminder of the...
