Misinformed

The taxpayer was a freelance locum optician who ran a Dollond & Aitchison franchise until April 2009. He made a loss in his final year of trading some of which was carried back against the previous year’s profit.

He applied to have the balance of the loss set against his 2010 income.

HMRC refused the claim and the taxpayer’s adviser agreed with the department’s decision that the losses could not be used against the taxpayer’s freelance income because it was different from working as a self-employed franchisor.

The Revenue issued a statutory demand for the tax saying it would sue for bankruptcy if the payment was not made.

The taxpayer applied to lodge a late appeal; the First-tier Tribunal said it was “arguable” the losses should have been allowed.

The judge concluded the taxpayer had “continued in his trade as a self-employed dispensing optician throughout” implying...