TC09639 - [2025] UKFTT 01113 (TC)

Neither Rule 27 nor the Directions contain any provision for a sanction for non-compliance. It is clear from Rule 7(1) that an irregularity resulting from a failure to comply with the Rules or a direction does not of itself render void the proceedings or any step taken in them. Having found that HMRC did, in fact, fail to comply with the Directions, it is necessary to consider what sanction (if any) is appropriate, as the possibilities in Rule 7(2) range from waiving the requirement to comply, restricting a party’s participation in proceedings to striking out a party’s case.

Mr Abernethy contends that, in the absence of any clear statement in the Directions, Rules or any reported authority that it was impermissible for a witness to exhibit documents to their witness statements which had not been included in the LOD, the breach should be waived and the Disputed Documents admitted.

As they failed to comply with the Directions, Mr McNall contends that HMRC should be restricted from relying on the Disputed Documents and any mention of them be removed from the witness statements.

However, it may not be necessary to reach a conclusion on this issue as what action (if any) to be taken as a result of HMRC’s non-compliance with the Directions is clearly subject to the outcome of the Cross-Application.