Latest by Constantine Christofi

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Jafari – HMRC criticised for breach of its duty to assist the Tribunal

Published on 18 December 2019. By Constantine Christofi, Associate

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In Jafari v HMRC [2019] UKFTT 692 (TC), the First-tier Tribunal (FTT) criticised HMRC for failing in its duty to bring relevant authorities to its attention.

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Contentious tax quarterly review (Q4 2019)

Published on 16 December 2019. By Adam Craggs, Partner and Constantine Christofi, Associate

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In this quarterly review we consider: HMRC’s increasing propensity to seek to strike out the taxpayer’s case; recent developments in relation to IR35; the timing of tribunal decisions; and the potential implications of the Inverclyde decision.

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Knibbs – HMRC's challenge to carry-back loss relief claims was correct

Published on 11 December 2019. By Constantine Christofi, Associate

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In Knibbs and ors v HMRC and R (oao Astley and ors) v HMRC [2019] EWCA Civ 1719, the Court of Appeal has held that Schedule 1B, Taxes Management Act 1970 (TMA) can apply to a claim for carry-back loss relief.

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Aozora GMAC Investment Ltd – HMRC did not breach a taxpayer's legitimate expectation

Published on 20 November 2019. By Constantine Christofi, Associate

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In R (oao Aozora GMAC Investment Ltd) v HMRC [2019] EWCA Civ 1643, the Court of Appeal has dismissed the taxpayer's claim that a statement in HMRC’s International Manual created a legitimate expectation, because the taxpayer had not relied on it substantively and, even if it had done, there was insufficient "unfairness" in frustrating the taxpayer's expectation.

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First Choice – HMRC ordered to pay taxpayer's costs as a result of its unreasonable behaviour

Published on 13 November 2019. By Constantine Christofi, Associate

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In First Choice Recruitment Ltd v HMRC [2019] UKFTT 412 (TC), the First-tier Tribunal (FTT) held that the taxpayer was entitled to its costs because HMRC had acted unreasonably.

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Cliff: Tax tribunal considers the meaning of ‘deliberate’

Published on 06 November 2019. By Constantine Christofi, Associate

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In Cliff v HMRC [2019] UKFTT 564, the First-tier Tribunal (FTT) has held that the taxpayer had 'deliberately' submitted an inaccurate return to HMRC.

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Leeds Cricket Football & Athletic Co Ltd – business with attached goodwill disposed of

Published on 16 October 2019. By Constantine Christofi, Associate

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In The Leeds Cricket Football & Athletic Company Ltd v HMRC [2019] UKFTT 0568 (TC), the First-tier Tribunal (FTT) has held that the freehold in a cricket ground involved the disposal of a business with attached goodwill and was not simply a disposal of land with attached income streams.

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JJ Management: No need to stand on formalities

Published on 09 October 2019. By Adam Craggs, Partner and Constantine Christofi, Associate

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It would appear from the decision of the High Court in R (oao JJ Management LLP and Ors) v HMRC [2019] EWHC 2006 (Admin), that HMRC can conduct informal enquiries outside of section 9A, Taxes Management 1970 (TMA).

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Publication

Tax update October 2019

Published on 03 October 2019. By Adam Craggs, Partner and Constantine Christofi, Associate

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In this month’s update we report on (1) the independent review of the disguised remuneration loan charge; (2) HMRC’s guidance on preparing for the off-payroll working changes which come into effect from April 2020; and (3) HMRC’s updated guidance on the tax registration of non-resident companies. We also comment on three recent cases relating to (1) an application for final and partial closure notices; (2) the validity of an enquiry; and (3) pre-entry loss rules.

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Rialas – Transfer of assets abroad provisions did not apply

Published on 02 October 2019. By Constantine Christofi, Associate

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In Rialas v HMRC [2019] UKFTT 520, the First-tier Tribunal (FTT) has found that the transfer of assets abroad (TOAA) provisions, originally contained in section 739 et seq, Income and Corporation Taxes Act 1988 (ICTA) did not apply.

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Draft Finance Bill 2019/20: HMRC’s new insolvency powers

Published on 27 September 2019. By Robert Waterson, Partner and Constantine Christofi, Associate

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Piercing the corporate veil? Robert Waterson and Constantine Christofi review the draft provisions that will empower HMRC to issue joint liability notices. (This article was originally posted on Tax Journal)

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Tinkler - Notice of enquiry invalid

Published on 19 September 2019. By Constantine Christofi, Associate

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In Tinkler v HMRC [2019] EWCA Civ 1392, the Court of Appeal has allowed the taxpayer's appeal and held that HMRC's notice of enquiry under section 9A, Taxes Management Act 1970 (TMA), was invalid.

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Levy – Tribunal rejects application for final and partial closure notices

Published on 30 August 2019. By Constantine Christofi, Associate

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In The Executors of Mrs R W Levy v HMRC [2019] UKFTT 418 (TC), the First-tier Tribunal (FTT), has held that HMRC was not in a position to issue either a final or partial closure notice.

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Haworth – Court of Appeal confirms HMRC misdirected itself and quashes payment notices

Published on 03 July 2019. By Adam Craggs, Partner and Constantine Christofi, Associate

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The recent unanimous judgment of the Court of Appeal in R (on the application of Haworth) v HMRC [2019] EWCA Civ 747, is the first successful judicial review challenge against follower and accelerated payment notices. The decision throws into question the way in which the relevant statutory provisions, contained in Finance Act 2014 (FA 2014), relating to follower and accelerated payment notices have been interpreted and operated by HMRC and as a consequence, many other notices may also have been issued by HMRC unlawfully.

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Ritchie - FTT guilty of procedural unfairness

Published on 26 June 2019. By Constantine Christofi, Associate

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In Ritchie v HMRC [2019] UKUT 007 (TCC), the Upper Tribunal (UT) has held that the First-tier Tribunal (FTT) had erred in finding that a loss of tax had been brought about by carelessness on the part of the taxpayers' professional advisers because, amongst other things, the carelessness of the advisers had not been adequately pleaded by HMRC and had not been put to any of the witnesses in cross-examination.

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Derry - HMRC challenge to share loss relief claim flawed

Published on 18 June 2019. By Constantine Christofi, Associate

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In R (on the application of Derry) v HMRC [2019] UKSC 19, the Supreme Court has dismissed HMRC's appeal and confirmed that the taxpayer was entitled to claim share loss relief in the year in which the loss was incurred, rather than the following year.

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Hargreaves: Even staler!

Published on 29 April 2019. By Constantine Christofi, Associate

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In Hargreaves v HMRC [2019] UKFTT 0244 (TC), the First-tier Tribunal (FTT) has again found that HMRC's discovery of an underpayment of tax had become 'stale' and accordingly the subsequent assessment issued under section 29, Taxes Management Act 1970 (TMA) was invalid.

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Macleod – insurance premiums paid not earnings from taxpayer's employment

Published on 15 April 2019. By Constantine Christofi, Associate

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In Macleod and Mitchell Contractors Limited and William Mitchell v HMRC [2019] UKUT 0046 (TCC), the Upper Tribunal (UT) has held that insurance premiums paid by the company on policies taken out in the sole director's name were not earnings from employment.

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When does delay by HMRC render a discovery assessment invalid?

Published on 07 March 2019. By Constantine Christofi, Associate

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In the recent case of Clive Beagles v HMRC [2018] UKUT 380 (TCC), the Upper Tribunal (UT) held that a delay of nearly two and a half years between (i) HMRC discovering that a taxpayer's self-assessment tax return was insufficient and (ii) HMRC issuing an assessment, was too long. As the discovery had become 'stale' by the time of the assessment, the assessment was invalid.

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Hymanson – HMRC's decision to revoke the taxpayer's fixed protection was unreasonable

Published on 11 February 2019. By Constantine Christofi, Associate

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In G Hymanson v HMRC [2018] UKFTT 667, the First-tier Tribunal (FTT) has held that HMRC’s decision to revoke the taxpayer's fixed protection was unreasonable and directed that it be reinstated. In so finding, the FTT applied the equitable maxim ‘that which should be done should be treated as having been done’.

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Wilsons – HMRC unable to obtain law firm's records

Published on 04 February 2019. By Constantine Christofi, Associate

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In Wilsons Solicitors LLP v HMRC [2018] UKFTT 627 (TC), the First-tier Tribunal (FTT) has held that the obligation to keep records under the Money Laundering Regulations 2007 (MLR) does not make a law firm a relevant data-holder for the purposes of HMRC's data-gathering powers.

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Banks: A real Brexit tax

Published on 21 January 2019. By Constantine Christofi, Associate

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In A Banks v HMRC [2018] UKFTT 617, the First-tier Tribunal (FTT) heard an appeal by Mr Arron Banks against HMRC's decision to deny him relief on certain donations he and his companies had made to the UK Independence Party (UKIP). The FTT decided that his rights had been infringed under the European Convention on Human Rights (the Convention) but there was nothing it could do to remedy that infringement.

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Addo - Disclosure against HMRC in tax appeals

Published on 20 December 2018. By Constantine Christofi, Associate

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In Addo v HMRC [2018] UKFTT 530 (TC), the First-tier Tribunal (FTT) considered the principles governing disclosure in the context of appeals before the FTT. This blog is based on an article which was first published in Tax Journal on 22 November 2018. RPC acted for the taxpayer in this case.

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Livery business qualifies for BPR for IHT purposes

Published on 05 December 2018. By Constantine Christofi, Associate

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In HMRC v Personal Representatives of the Estate of Maureen M Vigne [2018] UKUT 357 (TCC), the Upper Tribunal (UT), in dismissing HMRC's appeal, has confirmed that a livery business attracted business property relief (BPR) under section 105, Inheritance Tax Act 1984 (IHTA), as the business did not consist of wholly or mainly in making or holding investments.

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Reeves - CGT holdover relief available where transferor is foreign controller of transferee

Published on 25 October 2018. By Constantine Christofi, Associate

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In Reeves v HMRC [2018] UKUT 293 (TCC), the Upper Tribunal (UT) has held that a non-resident taxpayer was entitled to holdover relief from capital gains tax (CGT) on a disposal he had made when he gifted his interest in a limited liability partnership (LLP) to a UK-resident company, of which he was the sole shareholder.

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Expion: No valid determination of penalties by HMRC

Published on 24 September 2018. By Constantine Christofi, Associate

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In Expion Silverstone Ltd v HMRC [2018] UKFTT 0460 (TC), the First-tier Tribunal (FTT) has held that no valid determination was made by an officer of the board under section 100, Taxes Management Act 1970 (TMA), in respect of penalties issued following the failure to file Employment Intermediaries returns.

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J P Whitter - HMRC not obliged to consider impact of cancellation of Gross Payment Status on business

Published on 23 August 2018. By Constantine Christofi, Associate

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In J P Whitter (Water Well Engineers) Ltd v HMRC [2018] UKSC 31, the Supreme Court has confirmed the view of the Court of Appeal that HMRC has the power to remove 'Gross Payment Status' from sub-contractors under the Construction Industry Scheme, without an obligation to take into account the impact on the tax-paying business.

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Shaw: Tribunal cancels penalties … again!

Published on 06 August 2018. By Constantine Christofi, Associate

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In Shaw v HMRC [2018] UKFTT 0381 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties because HMRC had not satisfied the statutory requirements of section 8(1), Taxes Management Act 1970 (TMA) as a notice to file had not been validly served on the appellant.

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Ames: No EIS relief without income tax claim but Tribunal grants judicial review of HMRC's decision

Published on 16 July 2018. By Constantine Christofi, Associate

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In Ames v HMRC [2018] UKUT 190, the Upper Tribunal (UT) has held that capital gains tax (CGT) relief under the Enterprise Investment Scheme (EIS) is not available on the disposal of shares where no income tax relief was claimed on their acquisition. However, in refusing to allow a late claim for EIS income tax relief, HMRC had misapplied the relevant guidance, fettered its discretion, and failed to consider material facts and the UT therefore granted judicial review of HMRC's decision.

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Bayonet Ventures: Loan by pension scheme was not an unauthorised payment

Published on 25 June 2018. By Constantine Christofi, Associate

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In Bayonet Ventures LLP & Anor v HMRC [2018] UKFTT 262 (TC), the First-tier Tribunal (FTT), has held that a loan made to a limited liability partnership (LLP) by a pension scheme in which one of the partners of the LLP was a member, was not an unauthorised payment (section 164, Finance Act 2004) and should not be treated as a loan to the partner (section 863, Income Tax (Trading and Other Income) Act 2005 (ITTOIA)) as section 863 only applies if the LLP is carrying on a 'trade, profession or business with a view to profit', which it was not.

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Investec: payments to acquire partnership interests were trading in nature

Published on 06 June 2018. By Adam Craggs, Partner and Constantine Christofi, Associate

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In HMRC v Investec Asset Finance Plc and Another [2018] UKUT 0069 (TCC), the Upper Tribunal (UT) has held that payments made to acquire partnership interests are deductible in calculating the profits of the partners’ solo trades of dealing in those partnership interests.

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Patel: Enquiry and closure notices held to be invalid

Published on 25 May 2018. By Adam Craggs, Partner and Constantine Christofi, Associate

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In Patel & Anor v HMRC [2018] UKFTT 0185 (TC), the First-tier Tribunal ('FTT'), in finding in favour of the taxpayers at a preliminary hearing, has held that HMRC had not opened valid enquiries into the taxpayers' self-assessment returns, as the returns had not been made pursuant to a notice issued by HMRC under section 8(1) Taxes Management Act 1970 ('TMA').

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Hargreaves: Loyalty pays

Published on 13 April 2018. By Constantine Christofi, Associate

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In Hargreaves Lansdown Asset Management LTD v HMRC [2018] UKFTT 127 (TC) TC06383, the First-tier Tribunal (FTT) has found that loyalty bonus payments paid to investors were not "annual payments" for the purpose of section 683, ITTOIA.

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Hicks: Discover the limits

Published on 28 March 2018. By Constantine Christofi, Associate

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In J Hicks v HMRC [2018] UKFTT 22, the First-tier Tribunal (FTT), in allowing the taxpayer's appeal, has held that discovery assessments issued by HMRC were invalid as the condition contained in section 29(5), TMA 1970, was not satisfied.

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Cannon: Tax barrister not careless in relying on advice received from his accountant

Published on 07 February 2018. By Constantine Christofi, Associate

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In Cannon v HMRC [2017] UKFTT 859 (TC), the First-tier Tribunal has held that a tax barrister was not careless in relying on tax advice received from an accountant retained to give professional advice on specified issues.

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Cooke: Tribunal allows taxpayer's discovery assessment appeal

Published on 18 January 2018. By Constantine Christofi, Associate

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In Cooke v HMRC [2017] UKFTT 844 (TC), the First-tier Tribunal (FTT) has allowed an appeal against a discovery assessment issued by HMRC pursuant to section 29, Taxes Management Act 1970 (TMA). The FTT found that the 'hypothetical officer' could have been reasonably expected to be aware that certain claims in the taxpayer's return were excessive.

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Penalties for non-payment of APN can be avoided where it is reasonable to consider an APN unlawful

Published on 20 December 2017. By Constantine Christofi, Associate

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In Chapman v HMRC, the First-tier Tribunal (FTT) has confirmed that a reasonable belief that an accelerated payment notice (APN) is unlawful can constitute a reasonable excuse for non-payment.

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Jiminez: High Court quashes information notices issued to non-UK resident taxpayer

Published on 05 December 2017. By Adam Craggs, Partner and Constantine Christofi, Associate

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In Jimenez v (1) HMRC & (2) The First Tier Tax Tribunal [2017] EWHC 2585 (Admin), the High Court has quashed an information notice given by HMRC to a non-UK resident taxpayer.

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Bekoe: Tribunal cancels discovery assessments and penalties issued to taxpayer

Published on 27 November 2017. By Constantine Christofi, Associate

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In Edwin Bekoe v HMRC [2017] UKFTT 772, the First-tier Tribunal (FTT) has held that the taxpayer was not liable to assessments and penalties where he had demonstrated that deposits paid into his brother's bank account were loans and not undeclared taxable trading income and HMRC's reliance on the "assumption of continuity" principle had been misplaced.

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SUSSEX CARS - Tribunal orders HMRC to pay taxpayer's costs of appeal

Published on 18 October 2017. By Constantine Christofi, Associate

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In Sussex Cars Association v HMRC [2017] UKFTT 0691 (TC), the First-tier Tribunal (FTT) has exercised its discretion, under Rule 10(1)(b) of the Tribunal Rules, to make an order for costs against HMRC on the basis that it had "acted unreasonably in bringing, defending or conducting the proceedings".

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Bailey: Quality trumps quantity as Tribunal grants taxpayer principle private residence relief

Published on 27 September 2017. By Constantine Christofi, Associate

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In Stephen Bailey v HMRC [2017] UKFTT 658 (TC), the First-tier Tribunal (FTT) granted the taxpayer principle private residence relief, under section 222, Taxation of Chargeable Gains Act 1992 (TCGA), despite having only occupied the property in question for two periods of less than six months.

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Gekko – HMRC's unreasonable conduct leads to costs award against it

Published on 19 September 2017. By Constantine Christofi, Associate

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In Gekko & Company Ltd [2017] UKFTT 586 (TC), the First-tier Tribunal (FTT), in allowing an appeal against assessments to VAT and penalties, awarded the taxpayer its costs as HMRC's conduct had been unreasonable.

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BPP – Tribunal correct to strike out HMRC's case for failure to comply with Rules and Directions

Published on 23 August 2017. By Constantine Christofi, Associate

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In BPP Holdings Ltd v HMRC [2017] UKSC 55, the Supreme Court has confirmed that the First-tier Tribunal (FTT) was justified in directing that HMRC be barred from taking further part in the proceedings for failure to adhere to the Tribunal’s Rules and Directions.

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Anstock - Tribunal quashes penalties imposed for failure to comply with information notice

Published on 07 July 2017. By Constantine Christofi, Associate

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Penalties for failure to comply with an information notice issued by HMRC can only be imposed if the information notice in question is unambiguous, clear and precise.

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Berlioz - ECJ confirms that third parties can challenge 'foreseeable relevance' of tax information exchange requests

Published on 03 July 2017. By Constantine Christofi, Associate

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In Berlioz Investment Fund SA v Directeur de l'administration des Contributions directes (Case C-682/15), the ECJ has confirmed that a Member State's national court can review a tax information request made by another Member State in order to assess whether the requested information is 'foreseeably relevant'.

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Rai - Tribunal quashes penalties for non-payment of PPNs and criticises HMRC's 'nitpicking pedantry'

Published on 26 June 2017. By Constantine Christofi, Associate

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In Rai v HMRC [2017] UKFTT 0467 (TC), the First-tier Tribunal (FTT) was critical of HMRC's conduct and cancelled assessments to penalties which it had issued for failure to pay on time amounts demanded in partner payment notices (PPNs), as the statutory payment period had not expired.

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Rendall - Tribunal reduces penalties imposed for failure to file a partnership return to nil

Published on 01 June 2017. By Constantine Christofi, Associate

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In Rendall v HMRC [2017] UKFTT 356 (TC), the First-tier Tribunal (FTT) has reduced penalties imposed on partners for failure to file a partnership return on time to nil as the requisite information had already been disclosed to HMRC in the partners' personal self-assessment returns.

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Upper Tribunal confirms First-tier Tribunal has jurisdiction to amend tax return

Published on 02 May 2017. By Constantine Christofi, Associate

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In HMRC v Eric Walker [2016] UKUT 32, the Upper Tribunal (UT) has confirmed that the First-tier Tribunal (FTT) has the power, under section 50, Taxes Management Act 1970 (TMA), to amend a return if it decides the taxpayer is entitled to a smaller repayment than the one claimed.

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Tribunal concludes that capital gains tax legislation is compliant with Human Rights and EU law

Published on 20 March 2017. By Constantine Christofi, Associate

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In William Reeves v HMRC [2017] UKFTT 192 (TC), the First-tier Tribunal (FTT) has held that section 167 Taxation of Chargeable Gains Act 1992 (TCGA) is compliant with the European Convention on Human Rights (ECHR) and EU law.

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Upper Tribunal confirms transfer of pension fund is not a transfer of value for IHT purposes

Published on 15 February 2017. By Constantine Christofi, Associate

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In HMRC v Parry & Others [2017] UKUT 4 (TCC), the Upper Tribunal (UT) held that a transfer of funds from a registered pension scheme to a personal pension plan made by the deceased shortly before her death was not a 'transfer of value' for the purposes of section 3, Inheritance Tax Act 1984 (IHTA). Similarly, the deceased's omission to exercise her right to take lifetime benefits from the personal pension plan was not a transfer of value.

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