Stephen Lloyd Phillips v Commissioners for Her Majesty's Revenue and Customs
Decision date: 10 June 2010
Neutral citation: [2010] UKFTT 262 (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 concerned HMRC's compulsory VAT registration of Mr Stephen Lloyd Phillips from 24 September 2003 and a best-judgement VAT assessment of about £138,833 for the period 24.9.03–31.10.07. The Tribunal found that, because successive limited companies used by Mr Phillips were not properly constituted, compliant or shown to have taken over assets/trading, he was effectively trading in his own name from 24.9.03 (continuing conduct thereafter) and liable for VAT. The appeal was dismissed and the registration and assessment were confirmed. Costs were reserved.
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 an individual operates business activity through a series of limited companies that are dissolved, non-compliant or not shown to have received transfers of assets or to have genuinely traded, the individual may be treated as trading personally for VAT purposes; the mere existence of limited companies does not prevent HMRC treating the person as the taxable person if the companies were not properly constituted or compliant.
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 notes suggest obiter points that HMRC can revisit and consolidate assessments where a taxpayer negotiates while aware a relevant company is non-compliant or about to be struck off, and that informal arrangements (e.g. employment-tribunal consents, informal name changes) without formal company registration or asset-transfer documentation are weak evidence of corporate trading.