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HMRC v Dolphin Drilling

This is the Supreme Court’s decision in a long-running dispute concerning the operation of the leasing rules as they apply to movable vessels used for accommodation in the North Sea Oil industry. As such the substantive point is likely to be of relevance only to a small number of readers of these notes. But there is a wider point which will be of more general interest.

The crux of the dispute was whether certain use was incidental or not. The taxpayer had argued that the appeal should be heard by the Supreme Court because the word incidental was frequently used in other tax statutes and therefore the court could give authoritative guidance on the interpretation of the word incidental. The court refused to do this in trenchant terms:

“It is not appropriate that this court should make any rulings on the meaning of the phrase ‘incidental to’ or ‘incidental’ in statutory contexts other than the context of the provision which is the subject of this appeal, as regard must be had to