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BJ Patel v HMRC

In BJ Patel v HMRC (TC01228 – 13 July) a self-employed dentist subscribed for units in an enterprise zone unit trust which had invested in a building which qualified for industrial buildings allowance.

In his return the dentist claimed that the capital allowances should be set against the profits of his dental practice for the purpose of computing his liability to Class 4 NICs.

HMRC rejected the claim and the First-tier Tribunal dismissed the dentist’s appeal.

Judge Aleksander observed that ‘there is no statutory basis on which capital allowances arising in respect of expenditure on buildings in an enterprise zone can be set against earnings from a profession’.

Furthermore the dentist had no ‘legitimate expectation’ that his claim would be allowed.

Why it matters: The Tribunal upheld HMRC’s view that the allowances claimed by the dentist could not be...

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