RK Hosking v The Commissioners for HMRC
[2023] UKFTT 943 (TC)
Scrimshaw Wealth Management Limited v The Commissioners for HMRC
26 June 2024
[2024] UKFTT 637 (TC)
First-tier Tribunal
A company appealed tax bills tied to a complex tax scheme. They wanted to delay the case until a separate case in the British Virgin Islands was finished and also change their argument. The judge said the separate case wouldn't affect the tax case, and they dismissed the delay request. They also gave the company a final chance to give better details for their argument change; otherwise, that change request would be rejected.
Key Facts
- •Scrimshaw Wealth Management Ltd appealed against corporation tax, PAYE, and NIC assessments related to a tax avoidance scheme.
- •The scheme involved contributions to a remuneration trust, deducted as business expenses.
- •HMRC argued the scheme resulted in tax liabilities under various legislation.
- •Appellant applied for a stay of proceedings pending a BVI arbitration on the trust's validity and to amend its grounds of appeal.
- •The Tribunal directed the Appellant to provide further and better particulars (FBP) of its amendment application.
- •The Appellant failed to comply with the FBP direction.
Legal Principles
Arbitration awards are binding only on parties to the arbitration agreement.
Vale v Steinmetz [2021] EWCA Civ 1087 at [31]
Tribunals can deal with foreign law issues as questions of fact.
Anson v HMRC [2015] UKSC 44
Permission to amend grounds of appeal is usually granted if the point has a real prospect of success.
HMRC v AG Villodre SL [2016] UKUT 166 (TCC)
Part 7A ITEPA charges apply irrespective of the validity of the trust.
CIA Insurance Services Ltd v HMRC [2022] UKFTT 144 (TC) at [239]-[245], applying Clark v HMRC [2020] EWCA Civ 204
Outcomes
Appellant's application for a stay of proceedings was dismissed.
The BVI arbitration would not bind HMRC, and the Tribunal could address the trust's validity.
Unless the Appellant fully complies with the FBP direction within 14 days, its application to amend grounds of appeal will be dismissed.
The Appellant's failure to comply with the FBP direction was serious and prevented the Tribunal from assessing the merits of the proposed amendments.