In A D Bly Groundworks and Civil Engineering Ltd and another v HMRC [2024] UKUT 104 (TCC) (22 April 2024) the Upper Tribunal (UT) dismissed the companies’ appeals against a decision of the FTT that a deduction in computing trading profits was not allowable for provisions in respect of future payments under an unfunded unapproved retirement benefit scheme (UURBS).
Both taxpayers engaged the services of the same firm of chartered accountants to establish an UURBS under which they promised to provide directors and certain key employees with a pension in the future. The taxpayers made provisions in their accounts for their liability to make pension payments in future. The provisions were set at between 80% and 100% of the profits before tax for each period. The UURBS was notified to HMRC under the DOTAS provisions.
The FTT had dismissed the taxpayers’ appeals against HMRC’s decision to disallow the provisions. The companies...
