TC09548 - [2025] UKFTT 00700 (TC)

After introductory paragraphs, I began by citing the following passages from Kingston Maurward College v HMRC [2023] UKUT 00069 (“Kingston Maurward”):

“9.

The starting point is Rule 25(2) of the FTT Rules which requires the statement of case must:

“…(a) in any appeal, state the legislative provision under which the decision under appeal was made, and (b) set out the respondent’s position in relation to the case”

10.

The interpretation of that rule was elaborated on by Judge Mosedale in Allpay Limited v. HMRC [2018] UKFTT 273 (TC). The context was an appeal where the appellant’s success in its appeal against various VAT decisions and assessments made in relation to its bill payment services depended on it falling within the VAT exemption for financial services. To fall within the exemption the appellant’s services had to: 1) be “payment services” but 2) fall outside the exclusion for “debt collection”. The parties’ pleadings had focussed on issue 2) “debt collection”. The FTT ultimately concluded HMRC were not allowed to dispute issue 1) “payment services”, because on proper analysis HMRC had conceded that issue. However, it first considered whether the FTT had to consider whether issue 1) needed to be pleaded in order for HMRC to raise it, and in doing so analysed the requirement for HMRC to “set out [its] position”. At [14] it explained:

“The Tribunal’s rules require HMRC to set out its position in respect of a case; what that means is that HMRC should explain its position in sufficient detail to enable the appellant to properly prepare its case for hearing. Anything less may lead to injustice”

11.

Judge Mosedale went on to reject HMRC’s argument in that case that HMRC did not have to plead anything as burden of proof was on the appellant on the basis of the following reasoning (at [18]):

“ And there is no logic or justice in HMRC’s suggestion in any event. If the person with the burden of proof was required to prove everything, even those matters which the other party had not clearly disputed, then preparation for, and hearings of, appeals would be much longer and a great deal of time and money would be wasted. Moreover, trial by ambush is not justice: each party should be able to prepare to meet the other party’s case in advance of the hearing to increase the likelihood that the outcome of the appeal will be in accordance with the true facts of the case. Each party must therefore state in advance in summary terms what is in dispute and why.”

12.

She also extracted the following proposition from the Upper Tribunal’s decision in Fairford Group plc v HMRC [2014] UKUT 329 (TCC):

“[20] … it is not procedurally fair for the party without the burden of proof to do no more than say the other party must prove every part of their case. Both parties should set out the key parts of their legal and factual case in advance.”

13.

We agree with the above propositions, as do the parties. We would add that how those propositions fall to be applied, and the particular level of detail which will be sufficient to enable an appellant to properly prepare, will depend on the circumstances of the particular appeal.”

10.

The interpretation of that rule was elaborated on by Judge Mosedale in Allpay Limited v. HMRC [2018] UKFTT 273 (TC).”

I then considered each of HMRC’s reasons for issuing the Determinations, as set out in the paragraphs of the SoC under the heading “HMRC’s case”, see §57.