Boating bonanza

Was a trade carried on with a view to making profits?

The taxpayers were directors of T J Charters which was a boat chartering business. They claimed to offset the losses made by the business against their other income. HMRC refused on the ground that the business was not commercial (ITA 2007 s 66). The taxpayers appealed.

The First-tier Tribunal said the question of whether someone was a serious trader was objective. In the case of T J Charters the projected profit and loss account did not represent a business plan because it showed a lack of serious research and did not correspond to the way the enterprise was conducted. Its projection of the number of charters that could be obtained and the fees that could be charged was unrealistic.

The tribunal accepted that the financial downturn in 2008 would have had a depressing effect on the...