When we report on a decision of the Tribunal or the Court it is usually because it clarifies the law or highlights a risk or opportunity or there is some other lesson to be learned from it. Occasionally we report because we are speechless.
Wildin v HMRC [2022] UKFTT 42 (TC) definitely falls into the latter category.
Mr Wildin was blessed not only with a substantial house in the Forest of Dean but with three children and five grandchildren, all of whom seem to have lived reasonably locally. He was also in the fortunate position of having the space and resources to contemplate investing some of the latter in providing at his home leisure facilities of a character and extent that it is fair to say are outside the norm for domestic residences.
The case records that Mr Wildin’s home already boasted, inter alia, an ‘Oriental Garden’ replete with pagodas and a 1.5 tonne solid jade eagle; outdoor play areas with climbing frames and chutes, rope bridges and slides; a miniature fire engine and pirate ship; and an amusement arcade. To this Mr Wildin added a ‘Sports Complex’ which included a three-storey ‘giant dolls’ house’ (including a basement garage for the grandchildren’s electric cars); a sports hall and a squash court (both with viewing areas); two ten-pin bowling alleys; a small casino; a sixteen-seater cinema; and a fully-equipped gym.
Mr Wildin had not applied for planning permission. In his witness statement supporting his appeal against an Enforcement Notice he emphasised:
‘The building is for the incidental enjoyment of my house and is to be used by myself, my partner, my partner’s 22 year old son, my three grown up children and their spouses and my five grandchildren whose ages now range from 10 months to 8 years, and by my close friends when they visit me.’
The Note of Case lodged repeated that:
‘At the end of the day the building here is intended, despite the scale and range of activities available, to operate as something subordinate to the dwellinghouse and an amenity to Altea, as such; that is part and parcel of Mr Wildin’s large and well equipped, five bedroomed, family home serving the needs of all three generations of this extended family. It is not intended to be a sports or social club and Mr Wildin’s statement makes it clear that it will operate as such.’
(It didn’t help: eventually the Court of Appeal upheld an injunction requiring demolition of the Sports Complex and reinstatement of the land. The Tribunal decision records that having failed to comply, Mr Wildin was due to appear in proceedings for contempt of court in June last year.)
Somewhat surprisingly, Mr Wildin registered for VAT and sought to recover as input tax the costs of constructing the Sports Complex. And he claimed capital allowances on those costs and tax relief for a loss on operating a business.
Less surprisingly, HMRC suggested that these claims might be questionable. Their enquiry turned into a criminal investigation and Mr Wildin was interviewed under caution at Cheltenham Police Station.
HMRC’s claims for understated tax, VAT, penalties (which, remarkably, were calculated giving Mr Wildin the maximum possible reductions for disclosure) and surcharges totalled a shade under £300,000. The First-tier Tribunal, who did not find Mr Wildin ‘a credible or reliable witness’, dismissed Mr Wildin’s appeals.
Mr Wildin was and is a Fellow of the Institute of Chartered Accountants in England and Wales.
For more information, please get in touch with your usual BKL contact or use our enquiry form.