Chapter EM8810

Published date12 April 2016
Record NumberEM8810
Hudson v Humbles 42TC380

A capital statement drawn up by the Inspector for Hudson, director and controlling shareholder in Hudson, Dodsworth and Co Ltd, showed deficiencies, and Schedule E assessments were accordingly made on Hudson. The Revenue had no direct evidence to establish that the capital statement deficiencies were remuneration from the company. No evidence was given by or on behalf of Hudson before the Commissioners. In the High Court, Hudson’s Counsel argued that there was a duty on the Inspector to establish the precise source of the deficiencies. In the absence of any rebutting evidence to the Revenue’s prima facie contention, the judge did not agree. It was not contended by Hudson that the capital statement deficiencies should have been assessed as `company money’.

Frowd v Whalley 42TC599

Frowd was managing director of a company Frowd and Sons Ltd. Capital reconciliation statements showed deficiencies and Schedule E assessments were made on Frowd in respect of the deficiencies. Before the Commissioners, Frowd admitted that some part of the deficiencies came from the company, the rest representing loans and gifts from relatives, savings from frugal living etc. In the High Court he further argued that sums received by him from the company must have been stolen and were not therefore assessable as remuneration. The High Court upheld the Revenue contentions. It was not argued that the deficiencies should have been assessed on the company.

James v Pope 48TC142

Capital reconciliation statements prepared for James, and straddling a period of sole trading through a family company, showed deficiencies of £4,000, and assessments were made under Schedule D and (for the company period) Schedule E. The contention on behalf of James was that the Revenue had not discharged the onus of establishing fraud and wilful default, and that there was no evidence that the capital statement deficiencies (in the company period) had been voted as remuneration by the company. The High Court upheld the Commissioners decision as being reasonable. There was no contention that the deficiencies should have been assessed on the company.

Murphy v Elders 49TC135

Following an investigation, Schedule E assessments were made on Murphy and alternative Schedule D assessments on G L Murphy Ltd, his company. The company appeals were heard first and the General Commissioners held that on the balance of probabilities, the company’s accounts were correct. The Schedule E appeals were...

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