Interfish Ltd v Revenue & Customs

TYPE OF TAX � Corporation tax - deductibility of expenditure - sponsorship payments intended to improve fortunes of sports club - expectation of trade benefits principally as a result of recognition by others involved with the club of taxpayer�s benefaction - dual purpose of benefitting sports club and taxpayer�s trade - payments not deductible - direct promotion of taxpayer�s business also obtained - value of that promotion not deductible - Income and Corporation Taxes Act 1988, s 74

At the same time, it appeared to me that the sums paid might have included sums expended for direct promotion of Interfish to the public: there was, for example, evidence that Interfish�s logo had appeared on players� shirts, on tickets and on hoardings at the pitch.� I did not have full evidence on the make-up of the sums for which deduction was claimed.� I said in my decision that if the parties were unable to decide on the correct tax treatment of the deductions claimed by Interfish in the light of my decision, I would hear further argument.�

The statement proceeded to give reasoned estimates of the annual value that Interfish obtained from the payments.� It is sufficient to list these without going into Mr Colam�s reasons for the values he ascribed.

It was agreed at the hearing that promotion on hoardings had been separately paid for and the expenditure allowed by HMRC as deductible.� Item (v) is further explained in my previous decision at [26].

Acknowledging that a separate charge had been made, and its deductibility accepted by HMRC, in respect of the advertising hoardings (item (i)), Mr Peacock accepted in the further alternative that I should allow the deduction of the mid-range value of items (ii) to (v), which by my calculations would be �235,000.