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Beautician’s business

13 September 2010
Issue: 4272 / Categories: Tax cases
John Agnew (TC566)

The appellant’s wife worked part-time about ten hours a week as a manicurist pedicurist and beautician from her home. Her husband claimed he owned the business and that she was employed by him although in fact his wife effectively ran the firm on her own.

The appellant claimed losses from the trade against his income. HMRC began an enquiry questioning whether or not the appellant was trading with a view to profit.

Eventually HMRC decided the wages paid to the appellant’s wife were a transfer of income rather than expenses of the trade. The department issued assessments to recover the underpaid tax as a result of the disallowed loss relief claims.

The taxpayer appealed.

The First-tier Tribunal found that there was a trade but that it was undertaken by the appellant’s wife rather than the appellant. The wife...

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