Tax update - December 2019

In this month’s update we report on (1) two recent decisions concerning insolvent companies and EBTs in the context of insolvency law; (2) proposed legislation on HMRC’s use of automated processes; and (3) the taxation of cryptoasset transactions using exchange tokens. We also comment on three recent cases relating to (1) legitimate expectation; (2) the payment of costs by HMRC due to its unreasonable behaviour; and (3) the meaning of ‘deliberate’ in the Taxes Acts.

News items

High Court considers EBT arrangements in the context of corporate and insolvency law

In two recent High Court decisions concerning insolvent companies, employee benefit trust (EBT) schemes were considered in the context of corporate and insolvency law. Read more

Proposed legislation on HMRC automated processes

On 31 October 2019, HMRC published a technical note on proposed legislation which will apply both retrospectively and prospectively to perfect HMRC’s use of automated processes to serve certain statutory notices and carry out specified “routine” tasks. Read more

Policy paper on the taxation of cryptoasset transactions by companies and other businesses

On 1 November 2019, HMRC published a policy paper on the taxation of transactions undertaken by companies and other businesses using cryptoasset exchange tokens, such as bitcoin. Read more

Case reports

Aozora GMAC Investment – HMRC did not breach a taxpayer’s legitimate expectation

In R (oao Aozora GMAC Investment Ltd) v HMRC [2019] EWCA Civ 1643, the Court of Appeal has dismissed the taxpayer’s claim that a statement in HMRC’s International Manual created a legitimate expectation, because the taxpayer had not relied on it substantively and, even if it had done so, there was insufficient “unfairness” in frustrating the taxpayer’s expectation. Read more

First Choice Recruitment – HMRC ordered to pay taxpayer’s costs due to its unreasonable behaviour

In First Choice Recruitment Ltd v HMRC [2019] UKFTT 412 (TC), the First-tier Tribunal (FTT) has held that the taxpayer was entitled to its costs because HMRC had acted unreasonably. Read more

Cliff – Tribunal considers the meaning of ‘deliberate’

In Cliff v HMRC [2019] UKFTT 564, the FTT has held that the taxpayer ‘deliberately’ submitted an inaccurate tax return to HMRC. Read more