22 April 2020

Kieran Looney v HMRC; (UT)

Kieran Looney & Kieran Looney & Associates v HMRC [2020] UKUT 0119 (TCC)

Appeal considering whether a payment made on the termination of a contract for services should be treated as income or capital and which entity should recognise the payments made under the contract. The Upper Tribunal dismissed the taxpayers’ appeal holding that:

the termination payment was not a payment for continued use of secret processes which might have been a capital receipt (Evans Medical Supplies Ltd v Moriarty (H M Inspector of Taxes) [1957] 37 TC 54 distinguished);
the First-tier Tribunal had not erred in holding that the termination payment was compensation or consideration for the early termination of the contract and was therefore income in nature; and
all payments made under the contract should be recognised by the partnership that was the party to the contract.

Ben Elliott, Counsel, instructed by the General Counsel and Solicitor to Her Majesty’s Revenue & Customs for the Respondents.

To see the approved decision, click here.