05 August 2024

Anthony Outram & Ross Outram v HMRC [2024] UKUT 00203 (TCC)

The Upper Tribunal accepted that the First-tier Tribunal had set out the correct test when determining what was deliberate conduct. However, it considered that the Tribunal had erred in applying it. In particular, it applied its own assessment that there was no trade without considering why the Appellants appreciated that there was no trade. The Tribunal also accepted that a deduction could be claimed if there was a trade even if no loan had been made to the Appellants.

The Upper Tribunal also considered that it had been open to the First-tier Tribunal to review its decision. Of its own volition, the Upper Tribunal considered that the earlier Upper Tribunal decisions in JS v Secretary of State for Work and Pensions [2013] UKUT 100 (AAC)  Vital Nut Co Ltd v HMRC [2017] UKUT 192 (TCC) were wrongly decided. Whether the Tribunal was correct to form this view may be open to question especially given the approval of the earlier guidance by the Court of Appeal in Point West GR Ltd v Bassi [2020] EWCA Civ 795 at paragraphs 48-49.

Jeremy Woolf appeared for the appellants.

Sadiya Choudhury KC acted for HMRC.

You can read the judgment here.