TC09620 - [2025] UKFTT 01061 (TC)

The hearing was to consider HMRC’s application made pursuant to rule 8(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) (“the Rules”), for the tribunal to strike out the whole of the proceedings on the basis that the tribunal does not have jurisdiction in relation to them.

By a notice of appeal dated 19 September 2023 the appellant sought to appeal against three decisions notified by HMRC to CMBC Supply Ltd (“CMBC”) dated 2 December 2022:

The covering letter to CMBC dated 2 December 2022 (“the covering letter”) stated the following:

“HMRC is imposing these conditions due to the significant risk of outward diversion fraud within the Majestic Global FZE supply chain. This risk could lead to a significant excise duty loss to HMRC. As previously discussed…HMRC has been unable to satisfactorily demonstrate that 40% of movements consigned to Majestic Global FZE, checked over an 11 month period, have actually left the UK. We have given ample opportunity for relevant parties to provide evidence of these movements leaving the UK, however, we have not received sufficient evidence to date. We acknowledge your response of 31 August 2022 explaining that the movements had been closed on EMCS. However, this does not provide the required evidence to show that the alcohol left the UK. We will review the conditions every 30 days, taking into account any new information or records received. If we are not satisfied that the required evidence has been provided, the conditions will remain in place.

Evidence of the alcohol leaving the UK and being delivered to the intended destination warehouse could include:-

• Gate log or other warehouse record (not an eAD) which confirm the removing vehicle and trailer as well as times and dates on site

• Original CMR of despatch

• CMR for any subsequent/successive haulier

• Ferry or EuroTunnel ticket which confirms crossing time, vehicle and trailer IDs, vessel (if appropriate) and any details of the manifested goods

• Any communications between the logistics provider/haulier and CMBC regarding each consignment in respect of the reporting to site, carriage, trailer swapping and delivery, etc

• If a seal number was provided for the load, please provide details Evidence of the alcohol having arrived at the destination warehouse could include:-

• Signed and dated CMBC delivery note

• Record of payment for the goods, to include date, amount and source bank account details to include account holder details

• Any other commercial evidence which exists to support export and delivery of the goods to the stated destination.

Any evidence or information that you wish to provide should be emailed to me or sent to the address shown at the top of this letter. HMRC are also seeking to obtain this information and evidence from other parties

CMBC requested a statutory review of the three decisions on 30 December 2022. On 10 February 2023, HMRC notified CMBC that the decisions were upheld on the statutory review. CMBC has not appealed the three decisions upheld on review to the tribunal. The appellant requested a further review of the decisions on 9 July 2023. On 8 September 2023 HMRC refused the appellant’s review request, stating that only CMBC had standing to request a review. The appellant then filed a notice of appeal dated 19 September 2023 in respect of the three decisions.

After the filing and service of the amended strike out application, by an undated notice of appeal the appellant stated it wished to appeal against each (post-statutory review) review of the decisions dated 2 December 2022 and each “decision” not to review those decisions (“the additional decisions”). HMRC’s view is that the appellant cannot appeal in respect of the additional decisions either because no “decision” was made at all that could be the subject of an appeal, or because they are not relevant decisions for the purposes of s 13A Finance Act 1994 (“FA”). However, for the purposes of this application and the current hearing they and the appellant were content for the tribunal to proceed on the assumed basis that they are appealable decisions. Should it be found that the appellant has standing to appeal in principle, HMRC reserved the right to argue later that these “decisions” are not appealable “decisions” in any event.

It was common ground that the three decisions were each a “relevant decision” for the purposes of s 16(2A) FA, although the parties disagreed to some extent on which provision of schedule 5 FA they fall in. That schedule sets out different categories of decision in respect of which a person has a right to appeal to the tribunal. Section 16(2A) FA provides as follows:

“(2A) An appeal under this section with respect to a relevant decision…shall not be entertained unless the appellant is -

(a)

a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by the relevant decision,

(b)

a person in relation to whom, or on whose application, the relevant decision has been made, or

(c)

a person on whom the conditions, limitations, restrictions, prohibitions or other requirements to which the relevant decision relates are or are to be imposed or applied. …”

The issue is whether this appellant has standing within s 16(2A) (b) or (c). The appellant has the burden as to proof of standing (see Mather v HMRC [2014] UKFTT 1062 (TC) at [70] (as followed in Isle of Wight NHS Trust and ors. v HMRC [2023] UKFTT 23 (TC), at [44])).

It was common ground that under rule 8(2)(a) of the Rules, the tribunal must strike out the whole or part of the proceedings if it does not have jurisdiction in relation to the proceedings or that part of them. The tribunal is bound to determine jurisdiction as the Upper Tribunal (Tax & Chancery Chamber) (“UT”) held, albeit in different circumstances, in Raftopoulou v Commissioners for Revenue & Customs [2015] UKUT 579 (TCC) (“Raftopoulou”), [25]:

“…The strike out under consideration in this appeal was by contrast on the grounds of jurisdiction. It is clear that in relation to strike outs on the basis of lack of jurisdiction the test is a binary one; either the tribunal has jurisdiction or it does not. On appeal, the issue of law is whether the FTT made an error of law in its determination on jurisdiction. The task for this Tribunal is not simply to consider whether there is an arguable case that the FTT had jurisdiction….”

This approach was followed by the UT also in Woodstream Europe Limited [2018] UKUT 398 (TCC) (“Woodstream”. It was stated in that case that (1) a decision on jurisdiction is a binary one, which the tribunal must determine, (2) if the tribunal lacks jurisdiction it must strike out the proceedings (see [15]), (3) the proper task before the tribunal is not to identify potentially non-fanciful arguments that jurisdiction might exist (see [18]), and (4) these principles apply in relation to an application to strike out for lack of standing in relation to s 16(2A) FA. The task is to decide whether the appellant has standing or not. If it does not, then by virtue of s 16(2A) FA, the tribunal cannot not entertain the appeal and the striking out of the application must follow (see [19]).