Ardmore: withholding and UK source

The appeal in Ardmore Construction v HMRC [2018] EWCA 1438 was about the territorial scope of income tax. As a general principle a non-resident is only taxed on income that has a UK source (often but not always by way of withholding). There is little useful UK case law on the meaning of source and so market practice has developed around HMRC guidance. This decision had the potential to cut right across that guidance and so upset years of practice.

As it happened the Court of Appeal declined to lay down any general principles and simply concluded that as a question of fact it would not be appropriate to overturn the Upper Tribunal’s decision. It would have been...