TC09615 - [2025] UKFTT 01016 (TC)

The day before the hearing, Mr Gordon emailed the Tribunal to say that the parties had agreed that the substantive hearing should proceed on an “in principle” basis, so that any quantification of stock values required by the Sharkey v Werner Issue would be deferred, as would any quantification of costs relating to the Wholly and Exclusively Issue. As a result, the focus of the hearing was on whether HMRC was entitled to run the Section 66 Issue and the GAAP Issue, or whether they were precluded from doing so by the scope of the Closure Notices.

At the beginning of the hearing, I asked both Counsel to address me on the principles established by the case law about the hearing of preliminary issues, and as to whether, in the light of that case law, the determination of the scope of the Closure Notices should be left to the Tribunal hearing the substantive case. Mr Waldegrave had raised that case law in the Response, but in a different context (Footnote: ¹).

Neither Counsel addressed those principles directly, but both made it clear that they wanted the scope of the Closure Notices to be decided at this hearing. Mr Gordon said Mr Tinkler should know before the substantive hearing whether the Section 66 Issue and the GAAP Issue were in scope, as he might otherwise incur the unnecessary cost of preparing for both Issues. Mr Waldegrave said HMRC would prefer the scope to be decided as the result of this hearing.