TV celebrity Martin Clunes has recently lost his case at a First Tier Tribunal (FTT) to keep his name and details private in a forthcoming tax appeal over whether he is entitled to offset the cost of cosmetic surgery against his earnings when working out his income tax liability.
The tribunal heard that Clunes will argue he underwent the treatment for the purposes of his acting trade, and so should be able to claim the cost as an expense. However, HMRC maintains that the expense is not an allowable cost. Furthermore the FTT case related to a request from Clunes that his future tax appeal should be heard in private, and that any resulting published decision should be anonymous.
The tax appeal is in respect of a closure of an ongoing enquiry into Martin Clunes’ 2013 tax return during which HMRC had disallowed the cosmetic surgery costs. In reviewing the appeal to remain anonymous the tribunal judge stated: ‘I should make it clear from the outset, lest it be thought otherwise, that this is not a tax avoidance case, and HMRC do not suggest that it is.
‘It is also not part of HMRC’s case that the amount claimed is excessive or subject to attack for any similar reason, and it is undisputed that Mr Clunes has paid the entirety of the amount for which he has claimed relief.
‘The only question in the appeal is whether the relief must be denied because, as s 34 puts it, the expense was “not incurred wholly and exclusively for the purposes of the trade”.’
In deciding against granting anonymity the judge clarified that although disclosure of the treatments would be embarrassing for Clunes, any other person who had similar treatments and was claiming tax relief would find it impossible to convince a tribunal of the need for anonymity and the virtue of being an Actor did not change the basic principles.
Whilst this ruling does not affect the appeal (over the tax status of the procedure involved), it sets an interesting tone where celebrities wish for their tax affairs to remain anonymous with the courts using the same criteria that apply to less famous taxpayers.
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