A first-tier tribunal ruled that HMRC acted unreasonably by waiting eight months to inform a company it was not going to contest a case about tax relief on sponsorship payment.
The court heard that Southwest Telecommunications Group (STG) claimed a deduction for sponsorship payments to Exeter Chiefs Rugby Club.
The tribunal Southwest Communications Group Ltd v Revenue & Customs TC02370, took place in November.
In May 2008, HMRC started an enquiry into the company's return and in March 2010 they issued a notice of amendment rejecting the claim because the expenditure was not wholly and exclusively for the purpose of its business.
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.