NCL Investments: upholding the primacy of accounts

At times cases involving the tax treatment of employee incentive arrangements may seem much removed from the world of mainstream corporate tax and therefore any case law in this area may appear of little interest. However every now and then a case appears which is of interest outside what could be seen as a narrow area. This is the position in relation to the Court of Appeal decision in HMRC v NCL Investments Ltd and another [2020] EWCA Civ 663.

The facts in NCL Investments are relatively straightforward and uncontroversial. Refreshingly it was also agreed by both HMRC and taxpayer that this was not a case involving any form of tax avoidance or motivated by tax mitigation. The taxpayer and its sister company employed individuals and as is often...