Cliff v Revenue & Customs (INCOME TAX/CORPORATION TAX : Losses) [2019] UKFTT 564 (TC) (04 September 2019)

Cliff v Revenue & Customs (INCOME TAX/CORPORATION TAX : Losses) [2019] UKFTT 564 (TC) (04 September 2019)

The appellant was not trading commercially with a view to profit; his activities did not constitute a trade for tax purposes, particularly as Section 30 ITTOIA 2005 excludes animals kept for racing from trading stock. The description 'dealer in thoroughbreds' was inaccurate and used deliberately. The appellant failed to provide evidence of actual losses or trading activity. HMRC met the statutory requirements for discovery assessments and penalties. The appellant was not entitled to loss relief, and the assessments and penalties stand.

Citation
[2019] UKFTT 564
Parties
Appellant: David Cliff; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
04 September 2019
Procedural Posture
Income Tax/corporation Tax Appeal / First Tier Tribunal (tax) Final Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Corporation Tax, Loss Relief, Discovery Assessments, Penalties, Trading Status, Deliberate Inaccuracy
Tax Law Income Tax Corporation Tax Loss Relief Discovery Assessments Penalties Trading Status Deliberate Inaccuracy

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Parties

David Cliff

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Appeal / First Tier Tribunal (tax) Final Judgment

Legal Issues

  1. 1 Whether the appellant was trading commercially with a view to profit under Section 64 Income Tax Act 2007
  2. 2 Whether the appellant was entitled to trade loss relief for the relevant years
  3. 3 Whether the appellant acted deliberately or carelessly in his tax returns

Ratio Decidendi

The appellant was not trading commercially with a view to profit; his activities did not constitute a trade for tax purposes, particularly as Section 30 ITTOIA 2005 excludes animals kept for racing from trading stock. The description 'dealer in thoroughbreds' was inaccurate and used deliberately. The appellant failed to provide evidence of actual losses or trading activity. HMRC met the statutory requirements for discovery assessments and penalties. The appellant was not entitled to loss relief, and the assessments and penalties stand.

Court Disposition

Appeal dismissed

Orders

  • Discovery assessments for 2009/10, 2010/11, 2011/12 and closure notice for 2012/13 confirmed
  • Penalties for 2009/10, 2010/11, 2011/12 and 2012/13 confirmed