Sole trader loses tax case over legal costs

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A sole trader who was acquitted of manslaughter but convicted of perverting the course of justice has lost an appeal to deduct his legal costs from his tax bill.

As highlighted in a recent Tolley update, the difference between business and personal expenses for tax purposes often features in tribunals.

Paul Duckmanton (Paul Duckmanton and the commissioners for HMRC, upper tribunal, UKUT 0305) owned a vehicle transport business. In September 2002, one of Duckmanton’s lorries killed a pedestrian. The driver of the lorry, Mr Roberts admitted to driver error. But tests carried out by the police after the accident showed that the vehicle’s brakes were out of adjustment. It also emerged that the vehicle had missed a scheduled mandatory inspection in August 2002.

Duckmanton was charged with manslaughter and attempting to...

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04th Oct 2013 12:13

I am not surprised

Anyone who tries to deduct any expenses whatsoever from their tax bill is onto a loser.  Deducting it from their taxable income, well, perhaps that might stand a chance.

With kind regards

Clint Westwood

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07th Oct 2013 12:10


Well spotted.


And if anyone suggests you are being too pedantic they shouldn't be  advising on tax!

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07th Oct 2013 12:13


This was a reply to a point made by the first poster, but it got separated. 

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04th Oct 2013 16:35

Prison's OK?

Any argument that you cared only about your operator's licence and had no regard for the prospect of being banged up cannot expect to be taken seriously. For heaven's sake!

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07th Oct 2013 11:16

As a car driver, pedestrian and cyclist...

...I am constantly reminded of the dangers posed by HGVs on our roads.

I certainly don't want a debate about individuals' driving standards (let him who is without sin cast the first stone!) but there is surely no excuse for making juggernauts even more lethal than they already are, by maintaining them poorly.

So I agree with tough treatment for owners who don't maintain properly, and I see no reason for allowing the costs as a deduction.

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07th Oct 2013 11:29

He should have just checked out the non-allowability of relatively minor fines etc. etc. such as speeding fines. One simply cannot claim such as an expense . . . . even if one did actually incur them for what one might feel were wholly and exclusively business purposes.


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07th Oct 2013 11:37

Would it be the same if it was a Limited Company?

If it was a limited company, would it be the same case? 

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By ds
07th Oct 2013 11:40

The most shocking thing about this case is...

the £268,000 legal bill. What on earth do lawyers do that justifies these sort of fees. I think in such a case I would defend myself. If I lost at least I wouldn't have been screwed over by these parasites.

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07th Oct 2013 12:09

I wondered too


As is the case with such matters, it would have been a case of Counsel being instructed on the provision of expert advice. On the facts presented I doubt whether many would have been very enthusiastic about the prospects of success in overturning the HMRC view. You would think that the challenge would have been risk assessed.  

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07th Oct 2013 12:09

If he had £268K

to spend on legal fees you would think he would have had enough money to have an inspection and get the brakes fixed. I think any driver knows when your brakes aren't performing properly.

Thanks (6)
07th Oct 2013 12:14

This UT decision was released in July. Any news on an appeal?

This confused me initially as I thought it was news of the next stage of the appeal.

Do you know whether the taxpyer has appealed for leave to take it further?

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07th Oct 2013 12:40

Limited Co Liability

If it was a Limited Company then the directors would have been held liable under cooporate man slughter. Again the cost of legal expenses would have been allowed if proved to be for defending the company assets not the personal liability.

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07th Oct 2013 13:25

For the purposes of the trade

I should not think for one moment that the purposes of the trade includes deductions for committing criminal acts, or for defending oneself against being charged with one. He would have been better off claiming for a new set of disk brakes/brake pads and getting someone to realign them properly., That would have been within the purview of the relevant law. However, as he did not and one of his lorries killed someone, I would have thought that the unlawful killing was without the purposes of the trade. I mean, there are limits.

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07th Oct 2013 14:57

Perverting the course of justice is not required to

Mr. Duckmanton obviously tried to do something wrong like lie or hide something which caused the charge of perverting the course of justice. As this was not necessary, in performing his duties in the running of his business, (in fact wrong) the cost of defending this charge was not allowable as a tax deductible expense. Many businesses make mistakes; therefore the cost of defending the manslaughter element should have been tax deductible. In my view HMRC should have allowed a proportion of the legal costs as a tax deductible expense. I feel sorry for Mr. Paul Duckmanton. His intention was not to cause the killing of a pedestrian. Things go wrong all the time. Friendly Fire is an example. My brain is not working very well and is messing me up. Good job I do not run a haulage company.


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08th Oct 2013 12:14


I'm sure you're right to say that Mr D didn't intend to kill anyone, but at the same time he could have reasonably foreseen the consequences of defective brakes. 

It seems to me that being careful about safety (and incurring expenses as a result), is wholly and exclusively for the purposes of the business of running a haulage business within the law of the land.  Being negligent (and incurring expenses as a result) is not, because it's not part of Mr D's trade to go around killing pedestrians. 

Also (and this is incidental) killing pedestrians is actually against the law of the land. 

It's quite a tough one to get your head round.  Sorry if my prose is a bit brutal.  I sympathise with everyone involved, and that includes Mr D who must be devastated.

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08th Oct 2013 16:35

Profit from his crime

There is the legal maxim that one should not profit from one's crime. In the sense that he would not have to pay the tax on this deduction of expenses, he is profiting.

Therefore, the law worked as it should do to put up a bar against manslaughter being a claimable expense. This in my view is a good use of the legal principles which were applied.

Quite apart from the fact that killing people is not in the course of a trade or profession.


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10th Oct 2013 09:23

Missing the Point

I think a lot of people are missing the point.

He was charged as a result of the fact that he tried to cover up the missed scheduled maintenance and that the braked were 'out of adjustment' (whatever that means)

These were the charges he was defending, and hence why no deduction was allowed.  The charges were not directly related to his business, but to choices he had made or failed to make.

Might have been different if it was a large limited company.

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