Accelerate Corporation Limited v The Commissioners for HMRC
Decision date: 10 April 2025
Neutral citation: [2025] UKFTT 419 (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 challenged a discovery assessment and related adjustments by HMRC after Accelerate failed to include £369,000 of unpaid invoices to Intelligent Organics Ltd (IOL) in its accounts and tax return. The Tribunal held HMRC made a valid discovery, the insufficiency arose from carelessness by or on behalf of Accelerate so the six‑year time limit applied, and Accelerate failed to show the IOL debt was impaired in the accounting periods to 30 Sept 2016 or 30 Sept 2017. The discovery assessment and disallowance of unsupported consultancy expenditure were upheld and the appeal dismissed.
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: high
A discovery assessment is valid where a tax officer uncovers an insufficiency and the insufficiency was caused by carelessness by or on behalf of the taxpayer, permitting assessment within six years when no return was filed; and for tax relief for a bad debt the taxpayer must show contemporaneous impairment of the debt on the company’s balance sheet in the accounting period in which the deduction is claimed.
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 commented that internal unissued credit notes and continued supply of services after their creation reduce the weight of such documents as evidence of a write‑off, and that micro or small company status does not excuse non‑compliance with GAAP requirements for revenue recognition and impairment.