CBW has won yet another appeal before the Tax Tribunal, Cooke v HMRC. It was an appeal against a “discovery” assessment, that is one where HMRC raises an assessment late.
To do so, they have to show either that the taxpayer or his agent did not take reasonable care or that a tax officer could not reasonably have been expected to pick the issue up from the tax return. We were contending that the client and his accountant (a small general practice firm) both took reasonable care and that an HMRC officer ought to have picked up the issue from the tax return. We pointed out that HMRC were contending, in effect, that the standard expected of a general practice accountant is greater than that expected of an HMRC officer who is, by definition, a tax specialist. The tribunal agreed with us on both points!
This is the third case that CBW has taken before the Tax Tribunal this year and we have won all three.
In January we won a VAT appeal (Brady v HMRC) where HMRC were denying input tax relief for tax that the client had been obliged to return to the company under insolvency law, leaving him with a substantial bad debt.
The second was the Queen’s Club Ltd v HMRC. This related to VAT input tax on a major refurbishment of the club’s catering area. HMRC were seeking to disallow part of this tax on the basis that membership of the club is an exempt supply so a partial exemption calculation was required. We believe this was a policy approach that they had taken in relation to all sports clubs. They had won two previous cases on golf clubs, but we established that, as a fact, the sole use of the refurbishment work by The Queen’s Club was in connection with catering so the full amount of input tax was recoverable.