TC09639 - [2025] UKFTT 01113 (TC)

The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the “Rules”) apply to proceedings before the Tribunal (see Rule 1(2)). All subsequent references to Rules, unless otherwise stated, are to the Rules.

Rule 2 provides:

The Tribunal’s case management powers are set out in Rule 5, the relevant parts of which provide:

Rule 7 contains provisions for a failure to comply with the Rules or directions. It states (insofar as applicable):

The material part of Rule 15 provides:

The relevant part of Rule 16 provides:

Rule 27, insofar as applicable, provides:

In BPP Holding Ltd and others v HMRC [2017] UKSC 55 (“BPP”) the Supreme Court, having referred to guidance given to the Tribunal by the Upper Tribunal (“UT”) and Court of Appeal on “the importance” of observing rules in contentious proceedings, observed, at [25]:

“Such guidance to tribunals on tax cases was given by Judge Sinfield in the UT in McCarthy & Stone. In para 43, after referring to differences and similarities between the CPR and the tribunal rules, in that case the Tribunals Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698), he accepted that “the CPR do not apply to tribunals” but added that he did not “accept that the UT should adopt a different, ie more relaxed, approach to compliance with rules, directions and orders than the courts that are subject to the CPR”. The same view was expressed by Ryder LJ in paras 37 and 38 in the Court of Appeal in this case, including this: “I can detect no justification for a more relaxed approach to compliance with rules and directions in the tribunals”, and added that “[i]t should not need to be said that a tribunal’s orders, rules and practice directions are to be complied with in like manner to a court’s”.

Although the Tribunal (Judge Greenbank) in Janet Addo v HMRC [2018] UKFTT 530 (TC) (“Addo”) did not address the same issue as in this case (the issue in Addo concerned an application for a direction that HMRC produce documents that were not included in their LOD but referred to in a witness statement by an HMRC Officer), it was noted that the wording of Rule 27 suggested a relatively limited level of disclosure under which:

“57.

… it is open to a party to decide the documents on which it intends to rely or to produce at the hearing whether to support its own case or to disprove the case as put by the other party. If the relevant party chooses not to produce a particular document to which a witness refers that may well reduce the value of the evidence given by the witness and affect the strength of that party’s case overall. That is a matter for the Tribunal to assess and is a risk that the relevant party takes. While I accept [counsel for the Appellant’s] point that, if it is read in this way, the effect of the rule is that the level of disclosure under rule 27 is left largely in the hands of the disclosing party, in my view, on its terms, rule 27 does not require a party to disclose any other documents.

58.

That does not mean, of course, that that is the level of disclosure that a party ought to make. All parties are under a duty “to help the Tribunal to further the overriding objective” to deal with cases fairly and justly (FTR rule 2(4)). This obligation must extend to the level of disclosure made by the parties to other parties and to the Tribunal. However, if the level of disclosure made by a party under rule 27, whilst abiding by the strict terms of the rule falls short of the level that would be required to further the overriding objective, that is a matter that can be addressed by the making of orders or directions under rule 16 or rule 5(3)(d) whether on the application of the other party or by the Tribunal acting on its own initiative.”

In ClarkHill Ltd v HMRC [2018] UKFTT 111 (TC) (“Clark Hill”), the Tribunal (Judge Greenbank) considered an application, made by HMRC and opposed by the Appellant, to introduce new evidence which it was agreed was admissible and relevant. Having considered Rule 15(2)(a) and (b), and observing, at [18] that the case “clearly” fell within Rule 15(2)(b)(i), as the evidence had not been provided within the time allowed by a direction, Judge Greenbank, taking account of the “overriding objective” set out in Rule 2, admitted the new evidence and made an award of costs to the Appellant. At [20] he explained that:

“20.

In dealing with this application “fairly and justly”, I have taken into account the following issues.

(1)

The breach is significant. The initial hearing proceeded on certain assumed facts and the new evidence has been introduced at a very late stage.

(2)

The overriding objective is to deal with the case fairly and justly. That requires me to take account of all the available evidence in order to be able to come to a just and fair result. The form containing the option to tax [ie the new evidence] is clearly probative of an issue before the Tribunal and to exclude it would risk the Tribunal reaching a decision on incorrect facts.

(3)

There may be prejudice to [the Appellant] as a result. That prejudice can be mitigated to an extent by an award of costs in relation to the application.”

In relation to the admission of evidence, in R (Mobile Export 365 Ltd) v HMRC [2007] EWHC 1737 (Ch) (“Mobile Export”) Lightman J observed, at [20]:

“… The presumption must be that all relevant evidence should be admitted unless there is a compelling reason to the contrary.”

This observation of Lightman J was cited with approval by the Court of Appeal in Atlantic Electronics Ltd v HMRC [2013] EWCA Civ 651 at [31] (“Atlantic Electronics”). Atlantic Electronics was considered by Nugee J (as he then was) in HMRC v IA Associates Ltd [2013] EWHC 4382 (Ch) in which he said, at [35]:

“… that one starts with asking the question whether the evidence is admissible. It is admissible if it is relevant. It is relevant if it is potentially probative of one of the issues in the case. One then asks, notwithstanding that it is admissible evidence, whether [there] are good reasons why the court (or tribunal in this case) should nevertheless direct that it be excluded. As I have said in relation to the FTT’s powers, that is found in rule 15 which requires the FTT to find that it is unfair to admit the evidence.”

In HMRC v General Motors (UK) Ltd [2015] UKUT 605 (TCC) (“General Motors”) the UT (Henderson J, as he then was, and Judge Sinfield) considered whether the First-tier Tribunal had acted unfairly in admitting and relying upon documents produced during the hearing. Having endorsed the guidance of Lightman J in Mobile Export,at [108]. The UT continued, at [109]:

“We are also anxious to dispel any suggestion that the FTT Procedure Rules envisage a kind of evidential free for all where anything goes. Particularly in heavy and complex cases of the present type, it is important that directions for evidence should be given and adhered to on both sides, and that there should be no dispute about the evidential status of documents placed before the Tribunal. Otherwise, as the present dispute shows, there is much scope for misunderstanding and potential unfairness.”

I now turn to the issues.