Adelekun v Revenue and Customs (INCOME TAX/CORPORATION TAX : Losses) [2016] UKFTT 107 (TC) (18 February 2016)

Adelekun v Revenue and Customs (INCOME TAX/CORPORATION TAX : Losses) [2016] UKFTT 107 (TC) (18 February 2016)

The appellant was carrying on two separate trades—consultancy and leasing the OWS—so losses from the OWS could not be set off against consultancy profits. The discovery assessment for 2009-10 was validly made within time limits. There was no evidence of deliberate or careless inaccuracy in the 2012-13 return based on the arguments advanced at this stage.

Citation
[2016] UKFTT 107 (TC)
Parties
Appellant: Andrew Adelekun; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
18 February 2016
Procedural Posture
Income Tax/corporation Tax Appeal / Preliminary Decision on Validity of Assessments and Penalty
Outcome
Preliminary decision—appeal on single trade issue dismissed; discovery assessment for 2009-10 upheld; penalty for 2012-13 not upheld on current arguments; other issues to be determined separately.
Legal Topics
Income Tax, Corporation Tax, Loss Relief, Discovery Assessment, Penalties, Single Vs Multiple Trades
Tax Law Income Tax Corporation Tax Loss Relief Discovery Assessment Penalties Single Vs Multiple Trades

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Parties

Andrew Adelekun

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Appeal / Preliminary Decision on Validity of Assessments and Penalty

Legal Issues

  1. 1 Whether the appellant was carrying on a single trade or two separate trades for tax purposes
  2. 2 Whether losses from the OWS activity could be carried forward and set off against profits from consultancy activities
  3. 3 Whether the discovery assessment for 2009-10 was validly made

Ratio Decidendi

The appellant was carrying on two separate trades—consultancy and leasing the OWS—so losses from the OWS could not be set off against consultancy profits. The discovery assessment for 2009-10 was validly made within time limits. There was no evidence of deliberate or careless inaccuracy in the 2012-13 return based on the arguments advanced at this stage.

Court Disposition

Preliminary decision—appeal on single trade issue dismissed; discovery assessment for 2009-10 upheld; penalty for 2012-13 not upheld on current arguments; other issues to be determined separately.

Orders

  • Losses from OWS activities cannot be set off against consultancy profits.
  • Discovery assessment for 2009-10 upheld as valid.