The Commissioners for HMRC v Smartpay Limited (incorporated in the UK) & Anor
Decision date: 7 February 2022
Neutral citation: [2022] UKFTT 146 (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
HMRC applied for an order under FA 2004 s.314A that the "Optima Employed" contractor‑loan arrangements were notifiable and that Smartpay Ltd (UK) and Smartpay Ltd (IOM) were promoters. The First‑tier Tribunal found the arrangements met s.306(1) and the premium‑fee prescribed description, and it held both respondents were promoters. The tribunal made the order sought; parties have 56 days to seek permission to appeal.
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
The tribunal treated "arrangements" broadly to include schemes or series of transactions and held a "relevant business" under s.307(2) need only include some element providing services relating to taxation (it need not be the dominant element). "Makes available" means putting an arrangement at a person's disposal without a requirement to ensure the user can deploy it. The premium‑fee hallmark is assessed objectively against a hypothetical promoter when applying the Regulations.
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 noted that having found the premium‑fee hallmark applied it was unnecessary to consider other prescribed descriptions. It also observed that a s.314A order is a preliminary step and it was not required at that stage to decide whether UK domestic legislation has extra‑territorial effect over an overseas promoter.
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