The appellant company paid around £1.2 million to a rugby club over three accounting periods. The club was in severe financial difficulties. The First-tier Tribunal and Upper Tribunal held that the disbursements were not deductible because they were not “wholly and exclusively” for the purposes of the company’s trade (under what is now CTA 2009, s 54). The company appealed.
It was argued for the company that it had only one purpose in making its payments, and that was a business purpose, i.e. to improve the company's financial position. The purpose of improving the financial position of the rugby club was merely a necessary and intermediate purpose. It was also asserted that where there are two purposes, but one is merely an intermediate purpose on the road to a final purpose, the “wholly and exclusively” requirements are satisfied.
The company sought to find in Bentley Stokes and Lowless v
