TC09623 - [2025] UKFTT 01064 (TC)

The appellant has been assessed to additional income tax for the tax years 2008/2009 (£4,198.40) and 2009/2010 (£2,462.20 subsequently increased on review to £8,764.80) by virtue of discovery assessments originally issued on 6 March 2013 and 28 January 2014 (respectively) (“the discovery assessments”).

It is HMRC’s position that the appellant participated in a contractor loan scheme, and that payments which originally had been made to him by way of loans should be re-categorised as employment income on which he is liable to income tax.

It is the appellant’s pleaded position that the discovery assessments, both in their original form and as subsequently amended by HMRC, are defective.

On 31 December 2024, the appellant made an application under Rule 8 (as defined below) that HMRC should be barred from taking further part in these proceedings (“the barring application”).

In the barring application the appellant raises a new ground of appeal, namely that HMRC’s delays in investigating his affairs following the issue of the discovery assessments make it impossible for him to receive a fair trial.

I have to determine whether HMRC’s case has a reasonable chance of success. I will deal with the detailed case law later but in simple terms, I need to decide whether HMRC have a realistic as opposed to a fanciful prospect of succeeding in making out their case.

I was greatly assisted by the written and oral representations made by Mr Dyer and Mr Hopkins. I have considered in detail those representations and all of the relevant evidence. However, I have not found it necessary to refer to each and every argument advanced or all of the authorities cited in reaching my conclusion.

That conclusion is that HMRC’s case does have a realistic prospect of success. And so I have rejected the barring application.

The law which is relevant to the barring application is set out in the Appendix. Words and phrases defined therein bear the same meanings in the body of this decision.