In BES Commercial Electricity Ltd v HMRC [2021] UKFTT 456 (TC) (3 December 2021) the FTT held that payments made pursuant to a settlement agreement with OFGEM following regulatory breaches were fines or penalties (and not compensatory in nature) even where most of the payments were made to third parties; and therefore not incurred wholly and exclusively for the purposes of the trade. They were also not qualifying charitable donations. The case breaks no new ground but is none the less useful as a reminder that in the end what matters is the true purpose of a payment: descriptive labels may be a useful shorthand but they are no substitute for a detailed examination of the facts. Read the decision.
Because farming is a long-term activity – it may take...
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