Mrs Ruth Orme v Commissioners for Her Majesty's Revenue and Customs
Decision date: 7 September 2011
Neutral citation: [2011] UKFTT 618 (TC)
Overall AI summary confidence: medium
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: medium
Mrs Orme appealed HMRC's treatment of a £75,589.86 payment received on closure of her sub-post office. The First-tier Tribunal held the payment was properly taxable as compensation for loss of office under ITEPA s.401 (subject to the £30,000 exemption), and dismissed the appeal. The Tribunal also found HMRC validly opened a late enquiry by reason of a "discovery" under the TMA.
Ratio decidendi
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AI confidence in this ratio decidendi summary: medium
The Tribunal treated a sub-postmistress's payment on closure of her sub-post office as employment income under ITEPA s.401 (after applying the statutory £30,000 exemption), notwithstanding that prior practice had allowed post office salary to be included in trade accounts; additionally, a finding of relevant facts supporting HMRC's view amounted to a "discovery" permitting a s.9A TMA enquiry outside the usual 12‑month window.
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 Tribunal observed that administrative failures by HMRC (such as not sending advisory notices) or industry practice do not, in themselves, provide a basis in the Tribunal to overturn a properly made assessment; such complaints are for HMRC's complaints process or the Revenue Adjudicator rather than to negate tax liability.