In MA & Mrs BC Raynor v HMRC (TC01649 – 6 January) a married couple traded in partnership as haulage contractors. The husband was convicted of polluting a tributary of a river with insecticide (causing the death of more than 100 000 fish). The partners claimed the costs of defending the criminal proceedings as a deduction. HMRC issued amendments to the partnership statements disallowing the deductions and the partners appealed. The First-tier Tribunal dismissed the appeals. Judge Long observed that the prosecution had been against the husband as an individual rather than against the partnership. On the evidence ‘there was a personal motivation in incurring the expenditure as well as a business one’.
Why it matters: The Tribunal upheld HMRC’s view that the costs of defending criminal proceedings were not wholly and exclusively for the purpose of the defendant’s...
