The Upper Tribunal has rejected both the taxpayer’s appeal and HMRC’s appeal, fully upholding the decision of the FTT – Kwik-fit Group & Ors v HMRC [2022] UKUT 314 (TCC).
The case considered the correct interpretation of CTA 2009, s. 441(3), which provides that the company may not bring into account “so much of any debit in respect of that relationship as on a just and reasonable apportionment is attributable to the unallowable purpose”.
The Tribunal gave consideration to the Upper Tribunal’s decision in BlackRock, and also to Court of Appeal rulings in Fidex and in Travel Documents Service.
The Upper Tribunal in this case commented that:
“the reference to the apportionment being ‘just and reasonable’ accommodates the possibility that there may be more than one just and reasonable apportionment. The terminology of just and reasonable explicitly recognises the apportionment will be matter of fact-sensitive evaluation.”