The recent decision in MJP Media demonstrates that taxpayers should never assume that HMRC will accept that a transaction is of a certain nature, for example a loan, even where it is initially admitted by HMRC and where all the parties involved in the transaction treat it as such. Moreover, it highlights the difficulties to persuade a court of appeal to interfere, where the First-tier Tribunal has made findings of fact on the available and limited evidence. Therefore, companies should ensure that records and financial accounts which document transactions and the underlying flow of funds are complete and maintained for a number of years from the commencement of an inquiry until litigation is finalised.
