Patrick Rodney Boden & Anor v The Commissioners for HMRC
Decision date: 23 May 2024
Neutral citation: [2024] UKFTT 457 (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
The Budens (Patrick Rodney Boden & Anor) appealed HMRC discovery assessments for 2011–12 to 2014–15 concerning partnership income and expense claims. The Tribunal found the partnership should have used the accruals basis (so unpaid "proforma invoice" amounts were taxable), HMRC had validly made discovery assessments within time, the expenses adjustments made by the investigator were reasonable, and bad debt relief was not available. The appeals were 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
Where the statutory cash-basis rules did not apply, partnership profits were to be computed on an accruals basis and include amounts invoiced for services rendered even if unpaid; and HMRC may make valid discovery assessments by showing on the balance of probabilities that taxable income was omitted, with s36(1A)(b) extending the time limit where no return was filed and no notice to file was given.
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 it lacked jurisdiction to compel HMRC to follow alleged prior oral advice about cash accounting or flat-rate expense schemes, and endorsed that the principle of continuity can justify applying adjustments found reasonable in one year to other years absent evidence of changed circumstances.