Le Roux Zeeman and another v HMRC[2020] EWHC 794 (Admin) (3 April 2020), the High Court dismissed two judicial review claims challenging the validity of the loan charge legislation on the basis of the Human Rights Act 1998. The High Court agreed with the approach taken in Cartref [2019] EWHC 3382 (Admin) and found that, in the context of tax avoidance, the charge was justified by legitimate policy and was fair and reasonable in all the circumstances. The court considered the claim on the basis of the loan charge legislation as it currently stands, i.e. applying to loans from April 1999, as the Finance Bill 2020, which carves any pre-9 December 2010 loans from the charge, has not yet received royal assent.
RPS Consulting Services Ltd t/a RPS Business Healthcare v HMRC[2020] UKFTT 150 (TC) (19 March 2020)is decision on whether supplies of occupational health services were standard rated (as supplies of advice to employers) or exempt (as supplies of medical care). This is an extensive decision which examines the witness evidence in considerable detail before coming to the conclusion that, with a few exceptions, the services were exempt. Specialists in this field may want to study the case in its entirety. Advisers involved in tax litigation are recommended to read para 292 onwards for its thoughtful analysis of what happens when a tribunal does not agree with the arguments put forward by either party: to what extent in an adversarial system can a tribunal reach a conclusion which was not put to it? Here, the tribunal was clear that in the interests of justice it did have that power.
InROK Construction & Hire Ltd v HMRC[2020] UKFTT 145 (TC) (13 March 2020), the FTT considered a hardship application relating to the taxpayer’s proposed appeal against a VAT assessment. The normal rule is that a taxpayer cannot appeal to a tribunal on a VAT matter unless it first pays the VAT in dispute. However, the rule is disapplied in the case of hardship. Here, the taxpayer was faced with a VAT bill of some £6K but claimed that it was due a VAT refund of £13,000 and a refund under the construction industry scheme of £35,000. It argued that it was wrong to require it to pay the disputed VAT when it was owed a much greater amount by HMRC. The tribunal did not accept this. The company had to show real hardship, and this was not the same as saying it was due a refund. It had not submitted evidence to show actual hardship and therefore was obliged to pay the disputed VAT before it could proceed with its appeal. Although this decision is fully in accordance with the law, one can see why a taxpayer who in net terms is owed money by HMRC might feel aggrieved by the outcome.
FW Services Ltd v HMRC[2020] UKFTT 143 (TC) (12 March 2020) is one of those cases where the only reaction is to scratch your head in astonishment. The background was a tax investigation on a petrol station in Northern Ireland where HMRC had concluded that the taxpayer was under-declaring sales of diesel. HMRC had concluded that the total amount of omitted sales over a period over about 2 ½ years was over £4m, or over £5,000 of omitted cash takings per day. There was no evidence that that additional cash existed, and the figures were based on a consistent average amount of takings per hour, even though HMRC had not carried out field work at different dates and times during the week or taken account of reduced open hours on Saturdays. The tribunal was not impressed by the explanation from HMRC’s officers that they couldn’t do field work in the evenings and weekends because of restrictions on overtime working. Sunday sales were estimated as 50% of average sales with no evidence to support it. Not surprisingly the tribunal threw out HMRC’s case in its entirety. It is a useful reminder that although HMRC does have considerable powers to raise assessments in tax enquiries it still has to exercise best judgement in doing so: there was a complete failure to do so here.
Le Roux Zeeman and another v HMRC[2020] EWHC 794 (Admin) (3 April 2020), the High Court dismissed two judicial review claims challenging the validity of the loan charge legislation on the basis of the Human Rights Act 1998. The High Court agreed with the approach taken in Cartref [2019] EWHC 3382 (Admin) and found that, in the context of tax avoidance, the charge was justified by legitimate policy and was fair and reasonable in all the circumstances. The court considered the claim on the basis of the loan charge legislation as it currently stands, i.e. applying to loans from April 1999, as the Finance Bill 2020, which carves any pre-9 December 2010 loans from the charge, has not yet received royal assent.
RPS Consulting Services Ltd t/a RPS Business Healthcare v HMRC[2020] UKFTT 150 (TC) (19 March 2020)is decision on whether supplies of occupational health services were standard rated (as supplies of advice to employers) or exempt (as supplies of medical care). This is an extensive decision which examines the witness evidence in considerable detail before coming to the conclusion that, with a few exceptions, the services were exempt. Specialists in this field may want to study the case in its entirety. Advisers involved in tax litigation are recommended to read para 292 onwards for its thoughtful analysis of what happens when a tribunal does not agree with the arguments put forward by either party: to what extent in an adversarial system can a tribunal reach a conclusion which was not put to it? Here, the tribunal was clear that in the interests of justice it did have that power.
InROK Construction & Hire Ltd v HMRC[2020] UKFTT 145 (TC) (13 March 2020), the FTT considered a hardship application relating to the taxpayer’s proposed appeal against a VAT assessment. The normal rule is that a taxpayer cannot appeal to a tribunal on a VAT matter unless it first pays the VAT in dispute. However, the rule is disapplied in the case of hardship. Here, the taxpayer was faced with a VAT bill of some £6K but claimed that it was due a VAT refund of £13,000 and a refund under the construction industry scheme of £35,000. It argued that it was wrong to require it to pay the disputed VAT when it was owed a much greater amount by HMRC. The tribunal did not accept this. The company had to show real hardship, and this was not the same as saying it was due a refund. It had not submitted evidence to show actual hardship and therefore was obliged to pay the disputed VAT before it could proceed with its appeal. Although this decision is fully in accordance with the law, one can see why a taxpayer who in net terms is owed money by HMRC might feel aggrieved by the outcome.
FW Services Ltd v HMRC[2020] UKFTT 143 (TC) (12 March 2020) is one of those cases where the only reaction is to scratch your head in astonishment. The background was a tax investigation on a petrol station in Northern Ireland where HMRC had concluded that the taxpayer was under-declaring sales of diesel. HMRC had concluded that the total amount of omitted sales over a period over about 2 ½ years was over £4m, or over £5,000 of omitted cash takings per day. There was no evidence that that additional cash existed, and the figures were based on a consistent average amount of takings per hour, even though HMRC had not carried out field work at different dates and times during the week or taken account of reduced open hours on Saturdays. The tribunal was not impressed by the explanation from HMRC’s officers that they couldn’t do field work in the evenings and weekends because of restrictions on overtime working. Sunday sales were estimated as 50% of average sales with no evidence to support it. Not surprisingly the tribunal threw out HMRC’s case in its entirety. It is a useful reminder that although HMRC does have considerable powers to raise assessments in tax enquiries it still has to exercise best judgement in doing so: there was a complete failure to do so here.
