White v Revenue and Customs (INCOME TAX/CORPORATION TAX : Profits) [2016] UKFTT 791 (TC) (02 December 2016)

White v Revenue and Customs (INCOME TAX/CORPORATION TAX : Profits) [2016] UKFTT 791 (TC) (02 December 2016)

The appellant failed to discharge the burden of proof as to the existence and quantum of any loans from himself to M White Limited as at the relevant dates. Even if loans existed, they were found to be capital in nature and not incurred wholly and exclusively for the purposes of the appellant's trade. Therefore, no deduction for bad debt relief was allowable.

Citation
[2016] UKFTT 791 (TC)
Parties
Appellant: Jamie White; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
02 December 2016
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax) Rehearing After Remittal From Upper Tribunal
Outcome
Appeal dismissed
Legal Topics
Income Tax, Bad Debt Relief, Capital Vs Revenue Expenditure, Sole Trader Taxation, Schedule 1 AB TMA 1970, Section 35 ITTOIA 2005
Tax Law Income Tax Bad Debt Relief Capital Vs Revenue Expenditure Sole Trader Taxation Schedule 1 AB TMA 1970 Section 35 ITTOIA 2005

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Parties

Jamie White

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax) Rehearing After Remittal From Upper Tribunal

Legal Issues

  1. 1 Whether loans made by the appellant to his father's company existed and their quantum
  2. 2 Whether the loans were bad or estimated to be bad in the relevant tax years
  3. 3 Whether the loans were capital or revenue in nature

Ratio Decidendi

The appellant failed to discharge the burden of proof as to the existence and quantum of any loans from himself to M White Limited as at the relevant dates. Even if loans existed, they were found to be capital in nature and not incurred wholly and exclusively for the purposes of the appellant's trade. Therefore, no deduction for bad debt relief was allowable.

Court Disposition

Appeal dismissed

Orders

  • No relief for bad debts allowed under Schedule 1AB TMA 1970 or section 35 ITTOIA 2005
  • No amendment to self-assessment tax returns for the years in question