TC09625 - [2025] UKFTT 01066 (TC)

The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Tribunal Rules”) provides by Rule 2 that:

“(1)

The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.

(2)

Dealing with a case fairly and justly includes—

(a)

dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties;

(b)

avoiding unnecessary formality and seeking flexibility in the proceedings;

(c)

ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;

(d)

using any special expertise of the Tribunal effectively; and

(e)

avoiding delay, so far as compatible with proper consideration of the issues.

(3)

The Tribunal must seek to give effect to the overriding objective when it—

(a)

exercises any power under these Rules; or

(b)

interprets any rule or practice direction.

(4)

Parties must—

(a)

help the Tribunal to further the overriding objective; and

(b)

co-operate with the Tribunal generally.”

Rule 5 is headed “case management powers” and includes the following provisions:

“(1)

Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure.

(2)

…

(3)

In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may by direction

(a)-(c) …

(d)

permit or require a party or another person to provide documents, information or submissions to the Tribunal or a party;…”

Rule 16 is headed “Summoning or citation of witnesses and orders to answer questions or produce documents”, and paragraph (1) reads:

“On the application of a party or on its own initiative, the Tribunal may—

(a)

by summons (or, in Scotland, citation) require any person to attend as a witness at a hearing at the time and place specified in the summons or citation;

(b)

order any person to answer any questions or produce any documents in that person's possession or control which relate to any issue in the proceedings…”

Rule 27 is headed “Further steps in a Standard or Complex case” and reads:

“(1)

This rule applies to Standard and Complex cases.

(2)

Subject to any direction to the contrary, within 42 days after the date the respondent sent the statement of case (or, where there is more than one respondent, the date of the final statement of case) each party must send or deliver to the Tribunal and to each other party a list of documents—

(a)

of which the party providing the list has possession, the right to possession, or the right to take copies; and

(b)

which the party providing the list intends to rely upon or produce in the proceedings.

(3)

A party which has provided a list of documents under paragraph (2) must allow each other party to inspect or take copies of the documents on the list (except any documents which are privileged).”

CPR 31.7 is headed “standard disclosure – what documents are to be disclosed” and reads:

“Standard disclosure requires a party to disclose only–

(a)

the documents on which he relies; and

(b)

the documents which

(i)

adversely affect his own case;

(ii)

adversely affect another party’s case; or

(iii)

support another party’s case; and

(c)

the documents which he is required to disclose by a relevant practice direction.”

CPR 31.6 is headed “duty of search” and reads:

“(1)

When giving standard disclosure, a party is required to make a reasonable search for documents falling within rule 31.6(b) or (c).

(2)

The factors relevant in deciding the reasonableness of a search include the following

(a)

the number of documents involved;

(b)

the nature and complexity of the proceedings;

(c)

the ease and expense of retrieval of any particular document; and

(d)

the significance of any document which is likely to be located during the search.

(3)

Where a party has not searched for a category or class of document on the grounds that to do so would be unreasonable, he must state this in his disclosure statement and identify the category or class of document.”

CPR 31.10 sets out the procedure for standard disclosure, including the requirement that the list of documents “must include a disclosure statement” and what is to be included in such a statement.

In HMRC v Ingenious Games LLP and others [2014] UKUT 0062 (TCC) (“Ingenious”). Sales J (as he then was) said at [67] that:

“…in order for the main appeal to be determined fairly and justly, in accordance with the overriding objective, HMRC should have an equal opportunity to review the further relevant documents held by [the appellants] which they have not yet disclosed to HMRC and which they do not wish themselves to rely upon in the appeal…”

He continued at [68] by saying that it had been an error of law for the FTT judge to have held that the Tribunal Rules “are not intended to enable one party to make generalised requests for information from another party”, and then said:

“As rule 2 makes clear, the Rules are intended to be interpreted and applied so as to enable the FTT “to deal with cases fairly and justly”. If the circumstances of a case are such that comparatively wide or general orders for disclosure are necessary to enable the FTT to deal with that case fairly and justly, the Rules are intended to enable a party to make such generalised requests for disclosure. As explained above, this will be rare in tax cases, because usually HMRC will have seen the full documentation held by a taxpayer during the investigation stage, and the default disclosure provision in rule 27 of the Rules reflects this. But in the unusual circumstances of this case, the fair determination of the appeals did require the FTT to entertain and allow the request for further disclosure made by HMRC.”

Sales J also rejected the FTT’s finding that HMRC’s disclosure request was a “fishing expedition”, saying in the same paragraph:

“HMRC had to ask for disclosure of documents in relatively general terms, because they did not know what documents relevant to the issues pleaded in the Statements of Case the appellant partnerships might hold.”

In Addo v HMRC [2018] UKFTT 0530 (TC) (“Addo”), Judge Greenbank first considered [67]-[69] of Ingenious,and then said

“62.

From that passage, it is clear that the guiding principle for the Tribunal in exercising its powers to order or direct the disclosure of documents is to ask what is required to enable it to deal with the case “fairly and justly”, in accordance with the overriding objective in FTR rule 2(1).

63.

It is also clear that, subject to the matters to which I refer below, it should
ordinarily be regarded as fair and just for a party to be entitled to review documents held by the other party or to which the other party has access which are relevant to the issues in the case, even if those documents are not documents on which the other party itself intends to rely (and so the documents are not within FTR rule 27) and even if they are detrimental to the other party’s case.

64.

In this context, I also agree with comments of Judge Richards in Tower Bridge GP Limited v Revenue and Customs Commissioners [2016] UKFTT 0054 (at [23]) that the concept of “relevance” should not set “an unduly high bar” and should be taken, in principle, to include documents or information that might advance or hinder a party’s case or which may lead to “a train of enquiry” that might advance or hinder a party’s case.”

In Smart Price and others v HMRC [2019] EWCA Civ 841 (“Smart Price”), the appellants had been refused approval under the Alcohol Wholesaler Registration Regime (“AWRS”) on the basis that they were not fit and proper persons. The FTT had issued an order that HMRC disclose all documents considered by the officers who had made the decisions, including inter alia those on which they didn’t rely. HMRC appealed against that “global disclosure” direction to the UT and further appealed to the Court of Appeal. Rose LJ (as she then was) gave the only judgment, with which Newey and McCombe LJJ both agreed.

She referred at [43] to SOCA v Namli [2011] EWCA Civ 1411 (“Namli”), in which the Court had directed each party to disclose documents (i) on which it relied; (ii) adversely affected its own case; (iii) supported another party's case and (iv) was required to disclose by any relevant practice direction. In other words, SOCA did not have to disclose relevant documents which supported its own case, unless it chose to do so.

Rose LJ said at [53]:

“My conclusion is that disclosure from HMRC limited to that required by rule 27(2), would not be not sufficient in these AWRS appeals, even as a starting point…I agree with the conclusion of the FTT and Upper Tribunal in these appeals that where HMRC have access to many documents of which the applicant may be unaware, it is vital that the appellant trader have access to any exonerating material in the hands of HMRC. These cases are different from the more common appeals against a tax assessment where most if not all the material considered is provided to HMRC by the tax payer.”

At [56] she concluded:

“In my judgment, HMRC should give what corresponds to standard disclosure under the CPR but with the same qualification as the Court accepted in the Namli case, that is excluding documents which are not relied on and which are entirely adverse to the applicant's case.”

In Tideswell v HMRC [2024] UKFTT 00054 (“Tideswell”), the FTT (Judge Baldwin and Mrs Myerscough) held at [102]:

“…although this Tribunal has no supervisory role in relation to HMRC’s investigations, it does have power under rule 5(3)(d) of the FTT Rules to make a direction to require a person to provide “documents, information or submissions”, and under rule 16(1) to require a person to attend as a witness or to answer questions or produce documents. As Mr Watkinson fairly volunteered on behalf of HMRC, it is difficult to see circumstances in which a Tribunal would refuse an application for disclosure of evidence in HMRC’s possession that might help to establish an earlier duty point where it was properly made. Where an appellant believes that, despite requests, HMRC has not disclosed such material, that would be an obvious application for an appellant to make.”

In Charlene Hughes v HMRC [2024] UKUT 00108 (TCC) (“Hughes”) (Footnote: ²), the UT considered Ms Hughes’ appeal against an excise duty assessment. This had been issued in relation to cigarettes seized from the industrial unit on her property, where they had been stored by a third party. The UT accepted at [47] that an earlier release for consumption had occurred before the cigarettes had been stored there (ie, that the person who stored the goods was a previous holder). However, the UT went on to dismiss Ms Hughes’s appeal for four reasons, the first of which was that she had failed to meet her burden of proving who the previous holder(s) had been. The next reason was set out at [51] of the judgment, and reads:

“Second, a complaint by the Appellant that HMRC possessed or might have possessed information which would have been sufficient to identify the four factors relevant to an earlier duty point could have been dealt with by an application for disclosure before the FTT hearing. The FTT has power under Rule 5(3)(d) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules to make a direction requiring a person to provide documents, information or submissions, and under Rule 16(1) to require a person to attend as a witness or to answer questions or produce documents. If the Appellant believed that HMRC was failing to disclose relevant information, an application to the tribunal could have been made under these Rules.”

The UT also said, at [53], that:

“the obligation to assess the first duty point for which sufficient information is available is an obligation on HMRC as a body, not on the HMRC officer who issues the duty assessment. It follows that what mattered was not what Ms Cox [the investigating officer] knew personally about the investigations into a potential suspect, but what HMRC as a body knew.”