»Ê¹ÚÌåÓýapp

Richard Burrell (QB [1997] STC 1413)

In this case the judge, Mr Justice Ognall, held as follows:

â€�. . . I accept for this purpose the way in which the matter is expressed in the helpful skeleton argument on behalf of the Commissioners. »Ê¹ÚÌåÓýappy contend that insofar as it was asserted that two separate businesses were carried on respectively by (1) Partnership of father and son and (2) »Ê¹ÚÌåÓýapp son alone acting as a sole trader, the tribunal should examine the substance and reality and should only conclude that there are separate taxable entities if; (1) the so-called separate business [sic] are sufficiently at arms length each from the other and (2) the businesses have normal commercial relationships each with the other.â€�

»Ê¹ÚÌåÓýapprefore, you can consider treating businesses as a single entity where

• the ‘separationâ€� between two or more business activities is slightly blurred (in other words, some attempt has been made to separate the various business activities but they operate ‘hand-in-gloveâ€� with each other)
• the relationships between the businesses are not what you would expect from normal, independent but nevertheless associated trading entities
• several business activities are operated from the same or adjoining premises but the existence of one guarantees or underpins the viability of the other.

»Ê¹ÚÌåÓýapp decision in Burrell is also applicable in cases where the trader has split the business on a ‘temporalâ€� basis (for example, Mr Jones runs the business from 06:00 until 15:00 and Mrs Jones runs it from 15:00 until 00:00).