Timothy Jarvis, one of our tax strategy and benefits partners was interviewed this month by LexisNexis for his analysis of the recent decision of the Court of Appeal in the case of Changtel Solutions UK Ltd (formerly Enta Technologies Ltd) v Revenue and Customs Comrs [2015] EWCA Civ 29, [2015] All ER (D) 211 (Jan).
By way of background, HMRC had issued a winding up petition against Changtel Solutions UK Ltd (“Changtel”) in the Companies Court in respect of VAT assessments which Changtel was appealing in the Tax Tribunal. The issue which the Court of Appeal had to consider was which Court was the appropriate forum to determine whether the winding up petition had a real prospect of success: the Companies Court or the Tax Tribunal?
The High Court had previously determined that it was obliged to defer to the jurisdiction of the Tax Tribunal. The Companies Court had dismissed the winding up petition on the grounds that there was sufficient evidence that the winding up petition was being disputed in good faith on substantial grounds given that the Tax Tribunal had found that Changtel’s appeal had reasonable prospects of success.
The Court of Appeal allowed HMRC’s appeal and wound Changtel up. The Court of Appeal held that the Companies Court did not need to automatically defer to the Tax Tribunal. Instead the Companies Court ought to exercise its discretion as to whether it was appropriate for the matter to be determined by the Tax Tribunal. In this particular case, the Court of Appeal considered that the Companies Court did not need to defer to the Tax Tribunal and it subsequently examined the evidence before it and held that the winding up petition was not being disputed in good faith on substantial grounds and should be granted.
A full copy of the article is available on LexisPSL Restructuring & Insolvency.
