A Tax Tribunal Win

Very pleased to have helped the NWM Group win an important case on subsistence expenses in the tax tribunal – judgment at https://lnkd.in/eCg8EftU.

This goes back to the pre-2016 rules when employers needed dispensations. NWM had been paying the Revenue’s long-approved £5 and £10 scale rates for meals, but had not been auditing them after the event. HMRC expected there always to be some form of receipt to support the fact of taking a meal at work, even though it almost invariably would not say that the amount paid was £5 or £10. For that kind of money you would usually buy your lunch from a burger van or a sandwich shop – not the easiest places to get receipts from.

Anyway, the judges said that they found themselves in agreement with our counsel’s submission that ‘if receipts were necessary irrespective of the subsistence scale rates applying, then one wonders what benefit would be derived from having the scale rates at all. Those rates were supposed to be an administrative convenience for employers, employees and HMRC. But the processes apparently demanded by HMRC might arguably be more onerous than claiming deductions against tax for expenses in the amounts substantiated by the receipts. That cannot have been what Parliament intended.’

In other words, this was a bonkers regime imposed by HMRC all along. Congratulations to David Ewart KC and Laura Ruxandu of Pump Court Tax Chambers for shedding the light of day on it.