The Court of Appeal have handed down the latest judgment in the long-running dispute between Investec Bank and HMRC. The Court permitted HMRC to pursue an argument in favour of taxing additional income, even though the closure notice had only denied a deduction for expenditure. In doing so HMRC were allowed to argue that significantly more tax was due than assessed by the closure notice. In consequence the Court has modified, significantly, the Court of Appeal’s recent guidance in Fidex. However, ultimately HMRC’s attempt to collect additional tax on income was unsuccessful. The Court has applied the principle that companies cannot be charged to double tax in relation to the same profits.
Michael Ripley acted for Investec, led by Jonathan Peacock QC.