Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
, see all updates

Close Companies: Tax Cases: Settlement on the Company

Erddig Motors Ltd v McGregor 40TC95

This case was concerned with the source of £8,000 lodged in a bank account by a director of the company. The director gave conflicting explanations of the source, but the Commissioners decided that the money represented understated profits of the company.

Frederick Lack Ltd v Doggett 46TC524

In the years 1955 to 1958 Lack, the controlling director, had spent £10,332 on various identified items (purchase of land, loans etc), whereas Lack’s total known income for the six years 1952-53 to 1957-58 was only £7,500. Assessments were made on the company and appeals were determined by the General Commissioners, who made a finding of wilful default. In the High Court and the Court of Appeal the counsel for the Company relied on various legalistic points (jurisdiction of Commissioners, etc). The Commissioners decision was upheld by the Court of Appeal.

Bamford v ATA Advertising Ltd 48TC359

A director of the company advanced £15,000 from the company’s bank account to another company which he controlled. The £15,000 was written of as a bad debt. A small loan owed by the director to the company (£636) was also written off. The company claimed a deduction in calculating the profits for the £15,000 and the £636. The High Court held that the losses were not deductible, not being connected with or arising out of the trade.

Fen Farming Co. Ltd. v Dunsford 49TC246

The managing director of the company, R S Kilham, whose taxation history was bad (he had a £20,000 settlement for the late 1940s and early 1950s) died in 1963 and a non-disclosed bank account (omitted from the Certificate of Full Disclosure at the end of the enquiry) was discovered, the balance being £37,000. Case I assessments were made on the company on the grounds that the monies in the account were diverted profits. The company’s representations were legalistic (defects in the Stated Case, the Revenue were stopped from alleging that the £37,000 was company money because they had charged Estate Duty on it, etc). The Court of Appeal dismissed the company’s appeal.