GAAP 5, HMRC 0

Key points *Taxpayers win Mars and Grant Distillers in House of Lords. * Accounting principles allow depreciation to be included in carrying amount of stock. * No overriding principle that 'full' (gross) depreciation must be added back. * No Companies Act override either.

I'M NOT SUPERSTITIOUS but what do I make of the way my predictions seemed to jinx the earlier results in the Grant Distillers and Mars cases? I predicted that the Special Commissioners' decision in the former would be upheld and that the decision at first instance for Mars gave Grant Distillers a good chance of success because they had a better case. Both predictions turned out to be completely wrong. So in my last article on the subject ('Accounts do not contain whisky' Taxation 27 October 2005 page 83) I carefully refused to predict the House of Lords decision. The...