In Jerome Anderson v HMRC [2018] UKUT 0159 (TCC) the Upper tribunal upheld the FTT’s decision to disallow relief for the losses of a football academy run by an agent: it was not run on a commercial basis with a view to a realistic expectation of profit.

  • Mr Anderson (Mr A) worked successfully as a football agent for many years, representing a number of big name players such as Dennis Bergkamp and Thierry Henry. 
  • In January 2009 Mr A paid £3 million to Bafana, a soccer academy in South Africa, and in return he was able to choose three players from the academy, securing an interest for himself in any future transfer fees.
  • Bafana went into administration in 2011 and Mr A claimed trading losses of £3 million in his 2008/09 tax return.
  • The FTT denied Sideways loss relief on the grounds of lack of commerciality and lack of profit motive and because Mr A fell foul of anti-avoidance rules for sideways relief. Mr A appealed.

The Upper tribunal upheld the decision:

  • They agreed that Mr A’s activities in taking financial advice, holding meetings and viewing DVD’s of players, did not constitute a trade, being more akin to the activities of an investor, and, even if they had, he had not been carrying on the trade on a commercial basis with a view to a profit.
  • Mr A could not demonstrated that he fulfilled the requirement that he spend a minimum of 10 hours a week on the trade per s74C..
  • They also found that the FTT had been entitled to conclude that Mr A’s arrangements with Bafana were relevant tax avoidance arrangements for the purpose of s74B.

This appeal also concerned the question of whether HMRC had made a valid Discovery Assessment under s29 TMA 1970. Not only did the UT agree with the FTT that they had, it also said that the FTT had applied a stricter test than was required; as to the question whether the HMRC officer reasonably believed that there had been an insufficiency of tax, the test was a subjective one whereas the FTT had applied the test objectively.

Useful guides

Losses, trade losses and sideways relief
When you can claim and what you can do with a loss

How to appeal a decision of HMRC
Key steps in appealing a decision of HMRC.

How to appeal a tax penalty
Essential reading in cases were there are penalties too

Discovery assessment and time limits
How far HMRC can go back, what conditions must be met for a valid discovery

Penalties: Error in a return or document
How work out penalties for different forms of inaccuracies


Jerome Anderson v HMRC [2018] UKUT 0159 (UT)

Jerome Anderson v HMRC [2016] TC05314 (FTT)



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