Howes v Revenue & Customs [2012] UKFTT 179 (TC) (07 March 2012)

Howes v Revenue & Customs [2012] UKFTT 179 (TC) (07 March 2012)

Section 397 ICTA 1988 applies to restrict Mr Howes from claiming sideways loss relief for farming losses against employment and other income, as he succeeded to BPL's farming trade and the trade was never profitable in the relevant period. No direction under Regulation 72 was made for the 1999-2000 employment, so Mr Howes cannot be assessed for PAYE not deducted by Nirex UK Limited for that year.

Citation
[2012] UKFTT 179
Parties
Appellant: Michael Howes; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 March 2012
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed in principle; partial relief granted regarding PAYE liability for 1999-2000.
Legal Topics
Income Tax, Corporation Tax, Farming Losses, Sideways Relief, PAYE Regulations
Tax Law Income Tax Corporation Tax Farming Losses Sideways Relief PAYE Regulations

Case Brief

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Parties

Michael Howes

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether Mr Howes succeeded to BPL's farming trade for tax purposes and the timing of such succession
  2. 2 Whether Mr Howes was carrying on a farming trade between December 1993 and 1999
  3. 3 Whether section 397 ICTA 1988 restricts the ability to offset farming losses against non-farming income

Ratio Decidendi

Section 397 ICTA 1988 applies to restrict Mr Howes from claiming sideways loss relief for farming losses against employment and other income, as he succeeded to BPL's farming trade and the trade was never profitable in the relevant period. No direction under Regulation 72 was made for the 1999-2000 employment, so Mr Howes cannot be assessed for PAYE not deducted by Nirex UK Limited for that year.

Court Disposition

Appeal dismissed in principle; partial relief granted regarding PAYE liability for 1999-2000.

Orders

  • Mr Howes cannot set farming losses against employment or other income due to section 397 ICTA restriction.
  • HMRC cannot assess Mr Howes for income tax on 1999-2000 employment income from Nirex UK Limited to the extent PAYE should have been deducted.