“(3) The only payments which a registered pension scheme that is an occupational pension scheme is authorised to make to or in respect of a person who is or has been a sponsoring employer are those specified in section 175. (4) In this Part “unauthorised employer payment” means— (a) a payment by a registered pension scheme that is an occupational pension scheme, to or in respect of a person who is or has been a sponsoring employer, which is not authorised by section 175…” (a) a payment by a registered pension scheme that is an occupational pension scheme, to or in respect of a person who is or has been a sponsoring employer, which is not authorised by section 175…”
“(1) For the purposes of this Part the market value of an asset held for the purposes of a pension scheme is to be determined in accordance with section 272 of TCGA 1992. (2) Where an asset held for the purposes of a pension scheme is a right or interest in respect of any money lent (directly or indirectly) to any relevant associated person, the value of the asset is to be treated as being the amount owing (including any unpaid interest) on the money lent. (3) The following are “relevant associated persons”— (a) any employer who has at any time (whether or not before the making of the loan) made contributions under the pension scheme…” (a) any employer who has at any time (whether or not before the making of the loan) made contributions under the pension scheme…”
“If at any time after a loan is made — (a) there is an alteration in the repayment terms, and (b) as a result the repayment terms cease to comply with one or more paragraphs of section 179(2) (authorised repayment terms), there is an unauthorised payment of an amount equal to the larger of such of amounts A, B, and C (see paragraphs 14 to 16) as arise when that paragraph or those paragraphs are not complied with.”
“(1) A charge to income tax, to be known as the unauthorised payments charge, arises where an unauthorised payment is made by a registered pension scheme. (2) The person liable to the charge (a)-b)… (c) in the case of an unauthorised employer payment, is the person to or in respect of whom the payment is made. (3) If more than one person is liable to the unauthorised payments charge in respect of an unauthorised payment, those persons are jointly and severally liable to the charge in respect of the payment. (4) … (5) The rate of the charge is 40% in respect of the unauthorised payment. (6) … (7) An unauthorised payment may also be subject to (a) the unauthorised payments surcharge under section 209, and (b) the scheme sanction charge under section 239.” (a)-b)… (c) in the case of an unauthorised employer payment, is the person to or in respect of whom the payment is made. (a) the unauthorised payments surcharge under section 209, and (b) the scheme sanction charge under section 239.”
“(1) A charge to income tax, to be known as the scheme sanction charge, arises where in any tax year one or more scheme chargeable payments are made by a registered pension scheme. (2) The person liable to the scheme sanction charge is the scheme administrator.”
“The Tribunal erred in concluding that references in the operative documents to domain names were references only to the relevant domain names and did not include the websites of which those domain names were the addresses.”
“(A) the Company is the legal and beneficial owner of the Intellectual Property Rights (defined below). (B) the Company has established the Formwise Pension Scheme and has agreed to assign all right, title and interest in and to the Intellectual Property Rights to the Fund (defined below) on the terms set out in this Agreement and the Fund has agreed to licence use of the assigned Intellectual Property Rights back to the Company on the terms set out in this Agreement.”
“For it is universally conceded that, though it is a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think, fairly summarised by saying that the court should take that course if it appears that the commissioners have acted without any evidence, or on a view of the facts which could not reasonably be entertained.”
“it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law, and that this has been responsible for the determination. So there, too, there has been error in point of law. I do not think that it much matters whether this state of affairs is described as one in which there is no evidence to support the determination, or as one in which the evidence is inconsistent with, and contradictory of, the determination, or as one in which the true and only reasonable conclusion contradicts the determination. Rightly understood, each phrase propounds the same test.”
“The need for appellate caution in reversing the judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance…of which time and language do not permit exact expression but which may play an important part in the judge’s overall evaluation.”
“There is a well-recognised need for caution in permitting challenges to findings of fact on the ground that they raise this kind of question of law… It is all too easy for a so-called question of law to become no more than a disguised attack on findings of fact which must be accepted by the courts. As this case demonstrates, it is all too easy for the appeals procedure…to be abused in this way. Secondly, the nature of the factual inquiry which an appellate court can and does undertake in a proper case is essentially different from the decision-making process which is undertaken by the tribunal of fact. The question is not, has the party upon whom rests the burden of proof established on the balance of probabilities the facts upon which he relies, but was there evidence before the tribunal which was sufficient to support the finding which it made? In other words, was the finding one which the tribunal was entitled to make? Clearly, if there was no evidence, or the evidence was to the contrary effect, the tribunal was not so entitled.”
“The question is not whether the finding was right or wrong, whether it wasagainst the weight of the evidence, or whether the appeal court would itself have come to a different view. An error of law may be disclosed by a finding based upon no evidence at all, a finding which, on the evidence, is not capable of being rationally or reasonably justified, a finding which is contradicted by all the evidence, or an inference which is not capable of being reasonably drawn from the findings of primary fact.”
“Given that our domain name and website was such an essential tool for ourbusiness,£145,000 seemed like a small sum of money in comparison to the turnover it helped generate over the following months and years.”
“I didn't really have much to do with domain names, websites and so on. To me, it is the same thing: you buy a domain name and that becomes your website.”
“the proper interpretation of the term ‘domain name’, and the actual domain name included in the relevant contract, having regard to the factual matrix and the knowledge of the parties at the material time, is that it should be interpreted as covering not only rights to the domain name but also rights in the website.”
“the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant…the relevant reasonable person is one who has all the background knowledge which would reasonably have beenavailable to the parties in the situation in which they were at the time of thecontract.”
“the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to refer the construction which is consistent with business common sense and to reject the other.”
“(1) Subsection (2) applies if the Upper Tribunal, in deciding an appeal under section 11, finds that the making of the decision concerned involved the making of an error on a point of law. (2) The Upper Tribunal— (a) may (but need not) set aside the decision of the First-tier Tribunal, and (b) if it does, must either— (i) remit the case to the First-tier Tribunal with directions for its reconsideration, or (ii) re-make the decision.” (a) may (but need not) set aside the decision of the First-tier Tribunal, and (b) if it does, must either— (i) remit the case to the First-tier Tribunal with directions for its reconsideration, or (ii) re-make the decision.”
“Thus we must seek to discern the commercial intention, and the commercial consequences from the terms of the contract itself; and that feeds in to the process of deciding whether a particular word or phrase is in reality clear and unambiguous. It follows in my judgment that, where possible, the court should test any interpretation against the commercial consequences. That is part of the iterative process of interpretation. It is not merely a safety valve in cases of absurdity.” (3) It is also necessary to be aware that deciding whether a term is ambiguous is not always easy. As Briggs LJ (as he then was) observed in Sugarman v CJS Investments Ltd[2014] EWCA Civ 1239 : “There can unfortunately be a fine dividing line between that which appears commercially unattractive and even unreasonable and that which appears nonsensical or absurd. It causes continuing difficulty in the application of English law to problems of constructions, not least because it is not unusual for apparently reasonable judicial minds to disagree on the question whether a particular contractual or other documentary provision has crossed it….” (4) Another relevant principle is whether one outcome or the other produces a result which is absurd. It suffices to cite Lord Steyn in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] A.C. 749 at 771: “In determining the meaning of the language of a commercial contract and unilateral contractual notices, the law therefore favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would interpret them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on the niceties of language.” (5) There are, however, limits on the application of commercial common sense. See for example, Lord Neuberger in Arnold v Britton[2015] UKSC 36 : “…while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of the wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Experience shows that it is by no means unknown for people to enter into arrangements which are ill advised, even ignoring the benefit of wisdom of hindsight and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice. Accordingly, when interpreting a contract a judge should avoid rewriting it in an attempt to assist an unwise party or to penalise an astute party.”
“As security (“Security”) for the payment or discharge of the Secured Suns, the Borrower hereby charges the Assets to the Lender…”
“The assets referred to in the Schedule, including without limitation the Intellectual Property, and all and every interest therein or the proceeds of sale thereof which the Borrower may charge at law or in equity.”
“Mr Simpson: So what was the purpose of [the Langford Contract]? Mr Langford: To raise some money against my pension. Mr Simpson : Are you aware how the money was raised? Mr Langford: No. This is something to do with the domain name and the website.”
“The Tribunal erred in law in concluding that the amount of the loan included the previous loan by the Ballards’ pension scheme to the sponsoring employer that was ‘consolidated’ with the new loan made by the relevant transaction.”
“The Tribunal erred in law in concluding that the Appellant had not discharged the burden of proof as regards the database owned by Gannon Associates Limited and had reached the unsustainable conclusion that a database such as that owned by Gannon Associates Limited had nil value.”
“The Employer may consider paying an amount to the purchaser of the Trademark to continue to use the Trademark to avoid the nuisance of having to remove the Trademark from aspects of its business e.g. website, removal vans, etc. However, due to the lack of other options for the purchaser of the Trademark to monetise the asset the Employer would be in a strong bargaining position and in my view offer no more than say£1,000 to continue to use the Trademark.” (2) Mr Simpson submitted that the evidence pointed “in favour of a finding that the database has some material value”
“The fact that the Appellant’s valuers at the time (Metis) and to a lesser extent Ms Cawdron were prepared to defend this [Gannon] valuation by reference to royalty rates and discount rates suggests to us that, for this Appellant at least, the harsh light of reality was never allowed to penetrate the comfortable conclusions provided by the valuers and MLT in support of the client’s need for funding.”
“The onus of proof is on the Appellant to demonstrate that HMRC’s original valuation is incorrect. We have concluded that the Appellant has not displaced the burden of proof to overturn HMRC’s assessment in this case, either on the basis of their original approach (the Income Approach) or, alternatively on a Costs Approach.”
“The Tribunal erred in law in relation to its conclusion on the valuation of the Ballards trademark in two respects. Firstly, in assuming that, if selling its trademark to a person who wanted to compete in the same geographical market as Ballards, Ballards would insist on a non-compete clause preventing the purchaser from competing in that market. Secondly, in rejecting Mr Ballard’s evidence as regards the costs Ballards would have to incur to create and apply a new trademark and requiring documentary evidence to vouch what were, on their face, reasonable estimates, the appellant contends that the Tribunal was setting too high a standard, and thereby erred in law.”
“We have concluded that while it is possible that another business would wish to purchase the trademark the number of potential buyers in the real open market would be small. This is because: (1) It was accepted that Ballards was operating in a small local market therefore it is that small local market which is giving their trademark value. (2) We have assumed that anyone who wished to purchase their trademark would be doing so either: (a) in order to compete in that same small local market, but if that was the case it should be assumed that Ballards, as a “prudent business negotiating seriously” would have included a “non-compete” provision in the sale agreement extending to that local market; (b) in order to compete in a different market elsewhere, in which case it is hard to see why they would ascribe any value to the Ballards’ trademark and not simply have created a new trademark for themselves.” (a) in order to compete in that same small local market, but if that was the case it should be assumed that Ballards, as a “prudent business negotiating seriously” would have included a “non-compete” provision in the sale agreement extending to that local market; (b) in order to compete in a different market elsewhere, in which case it is hard to see why they would ascribe any value to the Ballards’ trademark and not simply have created a new trademark for themselves.”
“Mr Ballard provided evidence at the Tribunal of the replacement costs of a new trademark, essentially accepting the costs approach to valuing the trademark, which he estimated to be£60,500 . We saw no corroborating evidence of these costs and have some doubts about the basis of this estimate, particularly in the context of a business which was in any event planning to change its core activities.” “Mr Ballard did produce some estimates of the costs of reproducing the Ballards trademark, but we were not provided with any evidence to support his figures.”
“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them.”
“…As the authorities have repeatedly indicated, this Tribunal should be reluctant to interfere with the evaluative judgment of the FTT unless it is clear that the FTT has misdirected itself as to the law, misapplied the law to the facts or has reached a conclusion which is not open to it on the facts found (in accordance with the principles set out in Edwards v Bairstow).”
“The Tribunal erred in law in concluding that the time limit for making an application under s268 FA 2004 was six years from the end of the year of assessment in which the transaction took place, as opposed to from the end of the year of assessment in which the assessment was made.”
“(1) A charge to income tax, to be known as the scheme sanction charge, arises where in any tax year one or more scheme chargeable payments are made by a registered pension scheme. (2) The person liable to the scheme sanction charge is the scheme administrator.”
“The Board of Inland Revenue may by regulations make provision for and in connection with the making of assessments in respect of— (a)-(c)… (d) the scheme sanction charge…”
“Subject to the following provisions of this Act, and to any other provisions of the Taxes Acts allowing a longer period in any particular class of case, an assessment to income tax or capital gains tax may be made at any time not more than 4 years after the end of the year of assessment to which it relates.”
“(1) A charge to income tax, to be known as the scheme sanction charge, arises where in any tax year one or more scheme chargeable payments are made by a registered pension scheme. (2) The person liable to the scheme sanction charge is the scheme administrator.”
“There are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. Liability does not depend on assessment. That, ex hypothesi, has already been fixed. But assessment particularizes the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person taxed does not voluntarily pay.”
“We accept that a bundle of documents was sent in April 2016 by Mr Carwithen relating to these s 268 applications, but there is no evidence to support the statements of Mr Carwithen and Mr Dowding that they were actually sent to HMRC.”
“The court cannot substitute its own findings of fact for those of the decision-making authority if there was evidence to support them; and questions as to the weight to be given to a particular piece of evidence…are for the decision making authority and not the court.”
“(a) …reasonably believed that the unauthorised payment was not a scheme chargeable payment, and (b) in all the circumstances of the case, it would not be just and reasonable for the scheme administrator to be liable to the scheme sanction charge in respect of the unauthorised payment.”
“It is clear that, on its terms, s 268(7)(a) FA 2004 requires both that the scheme administrator has formed a belief that an unauthorised payment was not a scheme chargeable payment and that such belief must be reasonably held.”
“[71] …the task facing the FTT when considering a reasonable excuse defence is to determine whether facts exist which, when judged objectively, amount to a reasonable excuse for the default and accordingly give rise to a valid defence. The burden of establishing the existence of those facts, on a balance of probabilities, lies on the taxpayer… [72] In deciding whether the excuse put forward is, viewed objectively, sufficient to amount to a reasonable excuse, the tribunal should bear in mind all relevant circumstances; because the issue is whether the particular taxpayer has a reasonable excuse, the experience, knowledge and other attributes of the particular taxpayer should be taken into account, as well as the situation in which that taxpayer was at the relevant time or times.”
“(1) undertaken some steps to ensure that those on who they relied have the relevant expertise and (2) even if they did so, to scrutinise the transactions in which they are involved to fulfil their role as trustee of the pension fund and to at least apply basic commercial acumen to test the valuations which are being provided.”
“1. Applied a critical commercial and business view to the information provided to it from its professional valuers. 2. Carefully considered the legal identity of the assets which were to be subject to the sale and leaseback. 3. Given detailed scrutiny to the documents (and other related transactions) which formed the basis of the funding transaction to ensure that they reflected the transaction as it was intended to be implemented. 4. Applied time and commercial acumen to considering the actual risks in thetransaction before signing it off.”
“Often a statutory test will require a multi-factorial assessment based on a number of primary facts. Where that it so, an appeal court (whether first or second) should be slow to interfere with that overall assessment— what is commonly called a value-judgment.”
“It is important here to appreciate the kind of issue to which the principle applies. It was expressed this way by Lord Hoffmann in Designers Guild: ‘Secondly, because the decision involves the application of a not altogether precise legal standard to a combination of features of varying importance, I think that this falls within the class of case in which an appellate court should not reverse a judge's decision unless he has erred in principle.'” ‘Secondly, because the decision involves the application of a not altogether precise legal standard to a combination of features of varying importance, I think that this falls within the class of case in which an appellate court should not reverse a judge's decision unless he has erred in principle.'”
“making a value judgment which, assuming it has (a) found facts capable of being supported by the evidence, (b) applied the correct legal test and come to a conclusion which is within the range of reasonable conclusions, no appellate tribunal or court can interfere with.”
“The points on which the FTT relied for its conclusion that the Appellant’s belief that there were no unauthorised payments was not reasonable were that the Appellant had not done enough in relation to the earlier valuers to determine whether they had sufficient relevant expertise to be able to value intellectual property, and the Appellant had not done enough to scrutinise the valuations provided and apply commercial common sense to those valuations… The reliance placed by the Appellant on third party professionals who all claimed sufficient expertise to be able to value, properly, intellectual property assets was not unreasonable.”
“[212] On that basis, it is tempting to conclude that in this instance at least, MLT were acting reasonably in assuming that no unauthorised payment had been made. The alternative, and our preferred analysis, is that MLT behaved no differently for this Employer than for any other and were simply fortunate to find a relatively experienced valuer for a type of IP which is more straightforward to value. [213] We say this because we saw no evidence that the sign off process was any different in this case than in others: 1. Mr Asher told us that he did not hear anything from MLT after he had provided his valuation. 2. The MLA check list which we saw had several outstanding issues. 3. The documents which we saw had omissions. 4. The transaction was signed off despite credit issues being raised.”
“The statutory test…requires the Tribunal to take account of all the circumstances…it does not require any finding of dishonesty or negligence on the part of the appellants. It allows the Tribunal to examine all the circumstances surrounding the making and receipt of the unauthorised payments in each appellant’s case. This in turn allows the Tribunal to examine an appellant’s conduct or any other relevant mitigating circumstances pertaining to the payments or the appellant’s circumstances. It also allows the Tribunal to take account of the statutory scheme and the mischief the surcharge is designed to prevent.”
“(i) for contributions made by employers and employees to benefit from tax relief at the point of payment; (ii) for the funds contributed to be held securely to provide pension benefits that can, at least in usual cases, only be taken once an individual reaches the age of 55; (iii) for most income and gains received by the registered pension scheme in connection with the investments of contributions not to be subject to tax; but (iv) for amounts payable to an individual taking benefits to be subject, in most cases, to income tax (with the most important exception of the ability to take a tax-free lump sum equal to 25% of the accumulated fund).”
“[73] While conceptually it might be said that tax relief granted to individuals and employers at stage (i) is counteracted by the taxability of pension benefits at stage (iv), the overall scheme clearly involves a material cost to the Exchequer. First, the Exchequer suffers an obvious timing disbenefit as it gives relief at stage (i) a long time before it obtains tax at stage (iv). That timing benefit is not counteracted by a charge on income and gains of the pension scheme– see stage (iii). Second, a person's income in retirement will tend to be lower than income when working, so even in absolute terms the tax charged at stage (iv) will tend to be lower than the tax relief given at stage (i). [74] Parliament is content for the Exchequer to suffer these costs given the social utility of individuals saving for their retirement, but only where the entire bargain set out at [72] is respected. It is for this reason that different aspects of the unauthorised payments regime apply to different potential breaches of the bargain. For example, if a registered scheme impermissibly pays benefits to a member before he or she reaches 55, there is an unauthorised payment because the Exchequer has suffered the costs we have outlined, but since the funds have been drawn before retirement age, the social utility of funding retirement is not present. In a similar vein, if pension funds are lent by way of risky loans to an employer, the Exchequer is exposed to the risk that, even though it has given tax relief, and exempted income and gains of the scheme from tax, the funds are not ultimately available to pay pension benefits.”