In Charlton Chauffeur Drive Limited v HMRC [2021] TC08042, the First Tier Tribunal (FTT) found that sums received by a company from a firm of auditors under a legal settlement agreement were compensation in respect of employee fraud. As such, they were revenue in nature and not capital, as the company had claimed.

The FTT dismissed the appeal on the grounds that:

Useful guides on this topic

Wholly and exclusively...toolkit
What does 'wholly and exclusively' mean? How do you determine if a cost is wholly and exclusively incurred for the purpose of a trade? What cases are there? 

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Closure notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

External links

Charlton Chauffeur Drive Limited v HMRC [2021] TC08042


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