Legitimate expectation

The taxpayer a doctor established an employment agency for locums and doctors in 1987. He did half the work himself and found other doctors to do the remainder.

In 1998 he was suspended by the General Medical Council (GMC) and has not worked since nor has the employment agency had a turnover.

The taxpayer brought legal challenges against the council’s decision over the years but all failed.

For the tax years 2006/07 to 2008/09 the taxpayer claimed trading losses showing turnover as nil. HMRC refused the claims on the basis the taxpayer had no trade; the department issued discovery assessments for 2006/07 and 2007/08.

The taxpayer appealed saying his trade was continuing even though it had no turnover and he was entitled to loss relief from the trade against his general income....