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Accelerate Corporation Ltd v HMRC

A brief mention of this case as it contains a useful discussion of the timing of relief for bad debts.

Here, there was considerable doubt about whether the debts had in fact gone bad and, if they had, at what date. The case breaks no new ground, but the clear summary of the way that the law on debt write-offs works will be a useful reminder of the basic principles.

Quillan v HMRC

This raises an interesting point about tax and insolvency.

Where a loan which had been made to a participator (such as a shareholder) is written off the amount released is treated as income of the participator.

Here, the taxpayer’s company had been liquidated. His loan account was overdrawn by some £400K but he agreed with the liquidator that he would make a payment of £57K. The company was dissolved with the balance of the loan still unpaid, with the liquidator saying ‘no further funds are expected in the liquidation in this respect’.

HMRC