Cry Me A River Limited v The Commissioners for HMRC
Decision date: 12 June 2022
Neutral citation: [2022] UKFTT 182 (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
Cry Me A River Ltd appealed HMRC’s refusal to authorise SEIS compliance certificates for two share issues dated 19 June 2018. The Tribunal found Cry Me A River met the risk-to-capital condition, was carrying on the qualifying activity as a co-producer, and that there were no disqualifying arrangements with Secret Channel Films Ltd. The appeal was allowed and HMRC was wrong to refuse the SEIS certificates for the two investors.
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
The Tribunal held that, in the film-production context, a company’s role as a co-producer can amount to carrying on the company’s qualifying business activity for SEIS purposes, and that common industry structures such as special-purpose vehicles and subcontracting do not automatically prevent a finding that the company intended to grow and develop its trade (satisfying the risk-to-capital condition).
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 decision emphasises that contemporaneous documentary evidence is generally more reliable than later oral recollection and that industry practices (project-by-project fundraising, use of SPVs and subcontracting) are relevant contextual factors but are not necessarily dispositive against SEIS eligibility.