TAXATION

Corporation tax - award of penalties - requirement for small company to produce informationSlater Ltd and others v Beacontree General Commissioners and others: ChD (Mr Justice Lightman): 6 December 2001 Six companies, each of which S was a director and shareholder, were small companies as defined by section 248 of the Companies Act 1985.

Each company appealed against estimated assessments to corporation tax for the years from 1995 to 1999 and in consequence were served with notices under regulation 10(3) of the General Commissioners (Jurisdiction and Procedure) Regulations 1994 (SI 1994/1812) to produce information and analyses of their accounts.

General commissioners hearing the appeals awarded penalties against the companies for failure to comply with the notices.

The companies contested the awards, contending that they could not be required to produce more detailed information than that required of them in the abbreviated accounts delivered to the Registrar of Companies in accordance with section 247 of the 1985 Act.S in person for the companies.

Katherine Selway (instructed by the Solicitor of Inland Revenue) for the general commissioners and the Inland Revenue Commissioners.Held, dismissing the appeal, that in seeking production of information in accordance with the 1994 regulations, the commissioners had to act reasonably and fairly, their requirements having to be proportionate to the sums involved and the cost, but they were not required to accept the companies' figures on trust; and that, accordingly, in the circumstances they were entitled to require information, analyses and profit and loss accounts and to award penalties against the companies for their failure to comply with the notices.