Discontinued but when?

The taxpayer was a self-employed air conditioning engineer with an accounting year end of 31 March. He incorporated from 1 April 2009 and started trading as CC Ltd. He claimed annual investment allowance on a new van he bought in July 2008.

HMRC refused the claim on the ground that it related to the period when he was self-employed.

The First-tier Tribunal dismissed the taxpayer’s appeal saying his business after he incorporated was not the same as his activity beforehand. The taxpayer appealed.

The issue before the Upper Tribunal was whether the First-tier Tribunal had erred in law in deciding that the taxpayer permanently discontinued his trade on 31 March 2009.

The judge said it was clear that CC Ltd began trading during the accounting period starting on 1 April 2009 and the taxpayer did not operate his self-employed business in that period. He did not prepare any self-employed...