UT/2023/000049 - [2024] UKUT 00233 (TCC)

In short, we consider that the FTT reached the right decision on this issue, for the reasons which it gave. We respectfully agree with the FTT’s reasoning and conclusions at FTT[183]-[189] set out above, and the FTT made no error of law in reaching those conclusions.

Mr Firth’s submissions in this appeal reformulated and, to a significant degree, simply repeated the arguments put to the FTT, rather than identifying what are said to be errors of law in the FTT’s decision. The relevant passages of Mr Firth’s skeleton argument do not discuss the FTT’s decision or reasoning at all.

Indeed, it is not clear that the two arguments formulated by Mr Firth would serve to identify any error of law in the FTT’s decision on this issue. Mr Firth’s first proposition is that it is possible to make a reasonable estimate of expenditure and still claim a deduction for it. That may be so, but the specific argument addressed and decided by the FTT was that “it is open to an employer to come up with an arrangement which is intended to provide a genuine reimbursement of expenses to an employee and that, as long as the arrangement does not contain any profit element, the amount is not taxable (or, more accurately, is able to be deducted) irrespective of whether it precisely equals the expenses actually incurred”: FTT[175]. That is a much narrower question than the broad statement of principle formulated before us. The second proposition is that section 65 only permits HMRC to confirm that a payment which is not taxable is, in fact, not taxable. However, that proposition was accepted by the FTT in the course of its reasoning, at FTT[186].

Further, although we have not taken this into account in reaching our decision, while it may be acceptable to determine an issue as a matter of principle, with the consequences for quantum then agreed between the parties or remitted to the FTT, in this case there is no challenge to the FTT’s finding of fact that that “the arrangements operated by Mainpay were [not] a genuine attempt to reimburse subsistence expenses actually incurred”. It is not apparent what purpose would be served by a decision in principle on Mr Firth’s two propositions in this appeal in light of this finding.

The appeal under Ground 4 is dismissed.