W Stockler v HMRC

The decision in W Stockler v HMRC (No 2) (TC02099 – 5 July) is the latest instalment in what has become a long-running saga. A firm of solicitors undertook several items of unsuccessful personal litigation on behalf of its senior partner (S). In one of these cases S was required to pay costs to the successful party. The firm paid £160 000 (in six half-yearly instalments) in respect of these costs. It also paid several disbursements totalling more than £160 000. It claimed a deduction for this expenditure in computing its profits. When HMRC discovered this they issued amendments to the partnership statements under TMA 1970 s 30B. The partnership appealed contending that there had been no ‘negligent conduct’ within TMA 1970 s 30B(5) because S had been advised by an accountant that the expenditure was deductible. The Special Commissioners...