UT/2023/000126 - [2025] UKUT 00145 (TCC)

The Appellants say that the assessments did not relate to rental income because class 4 national insurance contributions were included on all sums assessed. As such, they argued that “rent cannot be used to support the assessment[s]” and therefore “rental income should have been excluded from the assessments”.

The argument that rent cannot be used to support the assessments, as we understand it, is that rent has not been specified as a source for the purposes of the assessments. It does not appear to us that the NCA or indeed the FTT sought to justify the assessments by reference to a tax loss relating to rental income. To that extent we agree with a submission of Mr Skyes that the rental income was therefore irrelevant. However, for the reasons given under Ground 1 that does not invalidate the assessments.

The grounds of appeal also assert that class 4 national insurance contributions have been charged on the whole of the income assessed and should not have been payable to the extent that the assessments were justified by reference to rental income.

The assessments were not justified by reference to rental income as such. However, it is not disputed that both Appellants, in some of the tax years, received rental income which had not been declared. There appear to have been some written submissions by the Appellants before the FTT that the assessments were invalid in so far as class 4 national insurance contributions were being charged in respect of rental income because it was not income from a trade, profession or vocation. However, we were not addressed on these submissions, the NCA’s response or any oral submissions before the FTT. Ms Black did raise the point before us that we do not know whether the rents would have been taxable as rental income or as the trading profits of a business. The FTT did not explore that question in the FTT Decision. Overall, we cannot be satisfied that this income was not subject to class 4 contributions.

In the circumstances, we are not satisfied that the FTT made any error of law in relation to rental income.