Ali Sadiq Jaafar v The Commissioners for HMRC
[2024] UKFTT 789 (TC)
Noel Spencer v The Commissioners for HMRC
28 July 2023
[2023] UKFTT 660 (TC)
First-tier Tribunal
Noel claimed government money for self-employed people during the pandemic. He'd stopped being self-employed before applying, even though he started a new company. The judge said he couldn't get the money because the rules say you have to be self-employed for a certain time, and he wasn't.
Key Facts
- •Mr. Noel Spencer appealed an assessment for £2,563 related to two Self-Employment Income Support Scheme (SEISS) claims for the tax year ending 5 April 2021.
- •The assessment was issued under paragraph 9 of Schedule 16 to the Finance Act 2020, for receiving SEISS payments he was not entitled to.
- •Mr. Spencer's business, Sign Directory (Leith) Limited, ceased trading on 5 April 2019.
- •He subsequently incorporated Bare Branding as a Community Interest Company (CIC) in October 2019.
- •HMRC argued Mr. Spencer wasn't eligible for SEISS because he ceased self-employment before claiming and Bare Branding was a company, not a sole trade.
- •Mr. Spencer claimed he continued self-employment through Bare Branding, believing it was a continuation of his previous business.
Legal Principles
Eligibility for SEISS grants is governed by the Treasury Direction and its accompanying Schedule, defining a 'qualifying person'.
Coronavirus Act 2020, sections 71 and 76; Treasury Direction; SEISS Schedule
A 'qualifying person' must, among other criteria, carry on a trade adversely affected by coronavirus, have filed a tax return for the relevant year, and carried on a trade in the preceding two tax years.
Paragraph 4.2 of the SEISS Schedule to the Treasury Direction
Schedule 16 FA 2020 allows HMRC to assess income tax on recipients of coronavirus support payments if they weren't entitled to them.
Schedule 16 Finance Act 2020
The burden of proof lies with the claimant to show they met the statutory conditions for SEISS eligibility.
Case Law (implied)
Outcomes
Appeal dismissed.
Mr. Spencer did not meet the criteria for a 'qualifying person' under the SEISS because his previous trade ceased before the claim, and his subsequent activities through a CIC did not constitute self-employment.