Interfish Ltd v Revenue and Customs Commissioners

Corporation tax – Computation of profits. The taxpayer sought to deduct payments made to a rugby club from computation of its profits for corporation tax purposes. The First-tier Tribunal (Tax Chamber) and the Upper Tribunal (Tax and Chancery Chamber) upheld the decision of Revenue and Customs Commissioners to disallow the deductions and found that the payments were not 'wholly and exclusively laid out or expended for the purposes of the trade', pursuant to s 74(1) of the Income and Corporation Taxes Act 1988. The Court of Appeal, Civil Division, in dismissing the taxpayer's appeal, held that, for the purposes of s 74(1)(a) of the Act, the courts had never wavered from the proposition that the business purpose had to be the sole purpose. There was no warrant for distinguishing between the two purposes by assessing one as being intermediate or subordinate to the other.

Category: