Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00314 (TCC)

Fecha: 24-Oct-2024

JUDGE VIMAL TILAKAPALA

JUDGE VIMAL TILAKAPALA

Equity Advisory Limited and Craig Allan Mellor (the “Applicants”) apply to the Upper Tribunal (Tax and Chancery Chamber) (“UT”) for permission to appeal against the decision of the First-tier Tribunal (“FTT”) (Tribunal Judge Christopher McNall and Tribunal Member Susan Stott) released on 24 October 2024 (the “FTT Decision”) following a hearing which took place over the dates 22- 24 July 2024 and published as (1) Equity Advisory Limited & (2) Craig Allan Mellor v The Commissioners of HMRC [2024] UKFTT 953 (TC).

The FTT refused the Applicants’ permission to appeal. The Applicants then renewed their application to the UT. The Applicants appealed on four grounds (each of which were further particularised). On review of the papers, in a decision of 17 June 2025 that was issued to the parties on 18 June 2025, I granted the Applicants permission to appeal on all of the grounds sought other than two grounds (Ground 1(c) and Ground 2). The Applicants subsequently applied for an oral hearing to renew their application to appeal on those refused grounds. Prior to the hearing the Applicants decided not to pursue their appeal on Ground 2. This is my decision following the oral renewal of the application to appeal on the remaining refused ground (Ground 1(c)).

The Applicants were represented at the oral renewal by counsel Mr Michael Ripley and HMRC were represented by counsel Ms Joanna Vicary. I was grateful for both Mr Ripley’s and Ms Vicary’s submissions.

The FTT Decision concerned the Applicants’ appeals against HMRC’s determination of the tax liability of a payment (the “Payment”) made by Equity Advisory Ltd (“EAL”) to Mr Mellor.

In dismissing the Applicants’ appeals, the FTT decided as follows:

(1)

That the Payment was taxable as earnings from Mr Mellor’s employment with EAL (FTT Decision [93] – [95])

(2)

The FTT did not have jurisdiction to address whether HMRC can pursue both EAL and Mr Mellor nor to deal with any argument about a PAYE adjustment (FTT Decision [136]-[137])

(3)

The Payment was an equity type return which should be treated as if made by EAL and paid to Mr Mellor in his capacity as a shareholder and so taxable as a distribution under s 1000(1)B CTA 2010 (FTT Decision [142]-[145])

(4)

If the Payment was neither employment income nor a distribution it would have been miscellaneous income chargeable in Mr Mellor’s hands under s 687 (1) ITTOIA 2005 [FTT Decision [147])