In C Lucy v HMRC [2016] UKFTT TC04878 the First Tier Tribunal (FTT) found that the taxpayer was not conducting any trade and disallowed a claim to set off losses against general income.

  • Mr Lucy claimed to have carried on trades in car hire and foreign exchange.
  • He claimed sideways loss relief in 2009/10, 2010/11 and 2011/12 despite not declaring any income from either activity in those three years.
  • HMRC denied the losses and Mr Lucy appealed.

Mr Lucy’s submissions in relation to car hire were limited:

  • Damage to cars, poor weather and global economic conditions prevented him from making a profit.
  • Car hire activities had taken place in 2000, from 2006 to 2008 and he had received enquiries about car hire in 2013 and 2015.
  • He believed he had shown a consistent timeline with regard to the car hire.

Mr Lucy’s submissions in relation to the foreign exchange trade were even more limited:

  • In 2010 he began a course to learn how to become a foreign exchange trader and from about 2011 he had traded using his own funds.
  • He had kept track of his expenses since 2009 demonstrating an intention to trade.
  • The losses were in relation to his course fees, office rental, computer software and travel.

The FTT agreed with HMRC, finding that there was no car hire trade

  • There were no lets during the period due to damage to cars.
  • A trader would have sought speedier repairs or sourced replacement vehicles.
  • He had no business insurance.
  • He had no business plan and had not kept proper business records.

The FTT agreed with HMRC, finding that there was no trade as a foreign exchange trader

  • He was undertaking a trading course from 2010 to 2012.
  • He did not trade on behalf of others and was not authorised to do so.
  • He did not seek Financial Services Authority (FSA) authorisation to trade.
  • He did not develop a business plan.
  • He did not advertise his services or attempt to gain clients.


We have seen a number of cases in recent months about whether or not trades were being conducted on a commercial basis, with some taxpayers, particularly those in the farming trade, being unfortunate in seeing their claims for relief denied.

By contrast, this case seems to have little if any merit at all, with the taxpayer apparently having misunderstood what constitutes a trade.  He represented himself at the tribunal and there is no mention in the case decision of him having taken any professional advice at any point.  We suspect that even the briefest conversation with an adviser about his activities would have been enough to establish that there was no merit in taking the case to tribunal.

See Losses (sideways): restriction on relief for uncommercial trades for more references to case law in this area.

Case reference: Christopher Lucy v HMRC [2016] UKFTT TC04878.