Case Law

This page shows a summary of relevant case law. To view the section of legislation to which the case law applies, click the link below:

Case Law

In Mac Giolla Mhaith (Inspector of Taxes) v Cronin & Associates Ltd 1984 III ITR 211 the company carried on an advertising business. The High Court held that the company was not carrying on a profession so no surcharge was payable on the company’s trading income.

In Rahinstown Estates Co v M Hughes (Inspector of Taxes) 1976 III ITR 517 a close company went into voluntary liquidation and Revenue sought to impose a surcharge on undistributed investment income. Distributions made in the course of a winding up were treated as distributions for surcharge purposes, therefore it was held that the surcharge applied.

The surcharge position of a company for any accounting period should be decided by reference to the company’s status at the balance sheet date. CHW (Huddersfield) Ltd v CIR 41 TC 92

Emerging from the case of CIR v Maxse 1919 12 TC 41, the factors indicative of a profession would be a requirement for either a purely intellectual skill or for a manual skill controlled by an intellectual skill of the operation, such as painting, sculptor or surgery.

Held to be Carrying on a Profession

Actress – Davies v Braithwaite 1931 18 TC 198

Barrister – Seldon v Croom-Johnson 1932 TC 740

Journalist – CIR v Maxse 1919 12 TC 41

Optician – CIR v North and Ingram 1918 KB 705

Held Not to be Carrying on a Profession

Dance band leader – Loss v CIR 1945 ER 683

Insurance broker – Durant v CIR 1921 TC 245

Chartered secretary – Burt & Co v CIR 1919 KB 650

Photographer – Cecil v CIR 1919 TLR 164

Stockbroker – Christopher Barker & Sons v CIR 1919 KB 222

Tax agent – Currie v CIR 1921 TC 245

Professional gambler – Graham v Green 1925 TC 309

This appeal concerned surcharges on undistributed income of service companies and whether the “principal part” of the Appellants taxable income was derived from “non-professional” services. 108TACD2020

This appeal required the Appeal Commissioner to determine whether the business of the Appellant consists of or includes the carrying on of a profession or the provision of professional services, such that a surcharge on the undistributed income of a service company applied under section 441. 76TACD2021