TC09615 - [2025] UKFTT 01016 (TC)

Fecha: 31-Jul-2025

The year 2013-14

The year 2013-14

78.

Neither party made separate submissions on the 2013-14 Closure Notice, but the wording is different and I considered it after the end of the hearing.

79.

The conclusion stated in that Closure Notice was that “your trade profit has been overstated”. As a result, HMRC reduced Mr Tinkler’s self-employment profit from £649,923 to £403,717. Mr Tinkler nevertheless appealed that Closure Notice.

80.

In defending the Closure Notice, HMRC can clearly rely on their primary argument that the Racing Activities are a hobby and not part of the Trade. If HMRC were to succeed, the 2013-14 Closure Notice would be confirmed.

81.

However, the same would not be true were HMRC to lose on their primary case but succeed on the Section 66 Issue because:

(1)

the effect of disallowing the expenses of the Racing Activity on a wholly and exclusively basis would be further to increase the profits (the opposite of the conclusion in the Closure Notice); and

(2)

the Section 66 Issue relates to the offset of losses, and there is no reference in this Closure Notice to losses.

82.

In relation to the GAAP Issue, HMRC calculated the figures used in the amendments to the 2013-14 return on the same basis, ie that Mr Tinkler had used incorrect stock values. The GAAP Issue is thus an integral part of the amendments made by that Closure Notice. It can thus form part of HMRC’s case at the hearing in relation to 2013-14 Closure Notice.