My Club Web Services Ltd v The Commissioners for HMRC

Facts

My Club Web Services Ltd, incorporated in 2013 as The Betting Service Limited, provided technology and web services enabling sports clubs to promote betting services to members and supporters and to receive the resulting revenue. HMRC gave advance assurance for Enterprise Investment Scheme purposes on 13 March 2018, and between 6 April 2018 and 31 October 2020 the company issued shares in numerous tranches in respect of which EIS relief was claimed and granted. It was common ground that the company was carrying on a qualifying trade when the shares were issued. On 3 January 2021, after giving advance warning, Metro Bank closed the company's account; the closure was the bank's decision, and the loss of banking facilities materially affected a business that depended on making and receiving payments. HMRC opened enquiries in December 2022 and on 3 April 2024 issued a withdrawal notice under section 234(3)(b) of the Income Tax Act 2007 and paragraph 16 of Schedule 5B to the Taxation of Chargeable Gains Act 1992, withdrawing relief of £1,049,985 on the basis that the trading requirement in section 181 of the Income Tax Act 2007 had ceased to be met. HMRC later also raised section 183 of the Income Tax Act 2007. The decision was upheld on review on 6 February 2025, an ADR process failed, and the company appealed to the First-tier Tribunal on 5 March 2025.