In David Keyl v HMRC [2015] UKUT 383 (15 July 2015), the UT found that a trade discontinued at the end of a chargeable period was discontinued during that period.
Mr Keyl carried on business as a sole trader installing, maintaining and repairing air conditioning systems. He had incorporated a company and transferred his business to it in March 2009, having purchased a new van in July 2008. Under CAA 2001 s 38A, capital allowances are not available if ‘the expenditure is incurred in the chargeable period in which the qualifying activity is permanently discontinued’. The issue was whether Mr Keyl had permanently discontinued his trade on 31 March 2009.
The UT noted that the reference to a ‘scintilla of time’ made by the FTT had been unnecessary. There had been no cessation of the trade before midnight on 31 March or after midnight on 1 April. On the clock striking midnight, Mr Keyl had ceased to carry on the trade which had begun to be carried on by his company without any hiatus.
Furthermore, a discontinuance of a trade at the end of a chargeable period was a discontinuance during that chargeable period; just as the end of a period was part of that period.
Why it matters: This decision confirms that what happens at the end of a chargeable period happens during that period. This may be relevant in many circumstances beyond the realm of capital allowances.
In David Keyl v HMRC [2015] UKUT 383 (15 July 2015), the UT found that a trade discontinued at the end of a chargeable period was discontinued during that period.
Mr Keyl carried on business as a sole trader installing, maintaining and repairing air conditioning systems. He had incorporated a company and transferred his business to it in March 2009, having purchased a new van in July 2008. Under CAA 2001 s 38A, capital allowances are not available if ‘the expenditure is incurred in the chargeable period in which the qualifying activity is permanently discontinued’. The issue was whether Mr Keyl had permanently discontinued his trade on 31 March 2009.
The UT noted that the reference to a ‘scintilla of time’ made by the FTT had been unnecessary. There had been no cessation of the trade before midnight on 31 March or after midnight on 1 April. On the clock striking midnight, Mr Keyl had ceased to carry on the trade which had begun to be carried on by his company without any hiatus.
Furthermore, a discontinuance of a trade at the end of a chargeable period was a discontinuance during that chargeable period; just as the end of a period was part of that period.
Why it matters: This decision confirms that what happens at the end of a chargeable period happens during that period. This may be relevant in many circumstances beyond the realm of capital allowances.
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