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Dawsongroup Ltd v HMRC

Business tax: Management expenses

In Dawsongroup Ltd v HMRC (Upper Tribunal – 11 May) a company (D) which had several subsidiary companies and had previously been a private company floated 25% of its shares on the Stock Exchange in 1988. The flotation was not a success and in 2000 D decided that its shares should be delisted and that it should revert to being a private company. It incurred costs of £433 574. It claimed a deduction for these as management expenses.

HMRC rejected the claim considering firstly that D was a trading company and was not an investment company and alternatively that the expenses did not qualify as 'management expenses'. The Upper Tribunal dismissed D's appeal. Mann J held that D qualified as an 'investment company' but that the expenditure in question did not qualify as 'management expenses'.

He observed that 'the...

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