London Luton Hotel BPRA Fund LLP v The Commissioners for HMRC
Decision date: 6 December 2024
Neutral citation: [2024] UKFTT 1104 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerns how to apportion a Residual Amount (£2,264,846) in an LLP's BPRA claim following earlier findings about qualifying and non‑qualifying expenditure. The First-tier Tribunal (FTT) held that apportionment was required and approved a percentage‑based method proposed by HMRC (non‑qualifying expenditure ÷ total expenditure × Residual Amount), adjusted to reflect items the FTT found qualifying. The FTT refused the LLP leave to reopen its earlier determination of methodology and gave case management directions for a further hearing to calculate the apportionment or for the parties to agree it.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Where a tribunal has determined that apportionment of a residual developer profit is necessary and set out a methodology, that methodology will not ordinarily be reopened at a later procedural stage absent intervening binding authority or "solid grounds." A mechanical percentage‑based apportionment formula (non‑qualifying expenditure divided by total expenditure, multiplied by the Residual Amount) is an acceptable means to allocate the Residual Amount across qualifying and non‑qualifying elements, subject to adjustment for items the tribunal has expressly found to be qualifying.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The FTT indicated parties should advance alternative methodologies at first instance and attempt to agree apportionment between themselves; the procedural doctrine in Henderson v Henderson supports finality and disfavors reopening issues without special circumstances. The tribunal also signalled that late attempts to adduce further argument on methodology would generally be refused.