In R Baker v HMRC (TC02790 – 26 July) a company (T) was incorporated in 2002. In 2005 there was a disagreement between its shareholders following which it was agreed that T would purchase the shareholding of its company secretary (B). T made various payments to B without complying with the requirements of the Companies Acts. Following an enquiry HMRC issued a formal decision that B had received a distribution of £120 000 from T in 2005/06. B appealed contending that the agreement between T and B had contravened Companies Act 1985 s 164 and should be treated as void. The First-tier Tribunal (FTT) accepted the latter contention and allowed B’s appeal. Judge Poole held that T’s acquisition of its shares from B should be treated as void and that T (which had subsequently gone into administration) was entitled to recover the money...
