In Risky Business Ltd v HMRC (TC02408 – 20 December) HMRC issued assessments under what is now CTA 2010 s 455 on a company which operated a lap-dancing club. The First-tier Tribunal upheld the assessments. Judge Mure observed that treating the additional takings as having been loaned to the directors rather than as fees or dividends produced ‘a more favourable practical result’ for the directors.
Why it matters: CTA 2010 s 455 provides that there is a tax liability where a close company loans or advances money to a participator. The First-tier Tribunal upheld HMRC’s view that the appellant company had failed to declare all its takings and that the undeclared takings should be treated as having been loaned or advanced to the directors.
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