Gilbert (T/A United Foods) v HMRC


The taxpayer (Mr G) operated a business of providing inexpensive sales representation to catering wholesalers.  The taxpayer worked on a commission basis adding 1% to the wholesalers’ invoices and represented nine suppliers, supplying approximately 120 customers.  In August 2008, an agreement was reached with one of the wholesalers, Fayrefield Foods Ltd, to sell as a going concern, the sales rights relating to their products only, back to them.  The agreement included the customer database, the goodwill and the trademarks that Mr G had registered and business information, together with any unperformed contracts and the records.  This left Mr G with 8 remaining wholesalers that he continued to represent.

Mr G claimed entrepreneurs’ relief on the grounds that he had sold a distinct “part of the business” as a going concern.  HMRC agreed that there had been the sale of business assets but contended that there had not been the sale of “part of the business”.

HELD:  The Tribunal allowed Mr G’s appeal and entrepreneurs’ relief was granted.