Upper Tribunal rules on mutuality principle – Taxpayer win

The Upper Tribunal has overturned the First-tier Tribunal and ruled that the mutuality principle did apply to certain sums received by the Medical Defence Union such that they were not subject to corporation tax. In the first case on the issue for a number of years the Upper Tribunal clarified the application of the mutuality principle, and applied a close contractual analysis to determine that the sums were surplus rather than profit, and so not taxable.

Jonathan Peacock QC and Edward Hellier appeared for the MDU.

The decision can be found here.