Orme v Revenue & Customs [2011] UKFTT 618 (TC) (07 September 2011)

Orme v Revenue & Customs [2011] UKFTT 618 (TC) (07 September 2011)

The compensation payment received by the appellant on closure of the sub post office was correctly assessed as compensation for loss of office under Section 401 ITEPA, not as business income, and was taxable after the £30,000 exemption. HMRC's enquiry was valid due to discovery of incorrect inclusion in business profits.

Citation
[2011] UKFTT 618
Parties
Appellant: Mrs Ruth Orme; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 September 2011
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Compensation for Loss of Office, Self Assessment, Schedule D, Section 401 ITEPA, Section 403 ITEPA
Tax Law Income Tax Compensation for Loss of Office Self Assessment Schedule D Section 401 ITEPA Section 403 ITEPA

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Parties

Mrs Ruth Orme

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether compensation payment to sub-postmistress on closure of sub post office is taxable under Section 401 ITEPA
  2. 2 Whether the payment should be included in business accounts or taxed as compensation for loss of office
  3. 3 Whether HMRC's enquiry into the tax return was valid

Ratio Decidendi

The compensation payment received by the appellant on closure of the sub post office was correctly assessed as compensation for loss of office under Section 401 ITEPA, not as business income, and was taxable after the £30,000 exemption. HMRC's enquiry was valid due to discovery of incorrect inclusion in business profits.

Court Disposition

Appeal dismissed