TC09639 - [2025] UKFTT 01113 (TC)

Mr McNall contends that if HMRC wish to rely on Disputed Documents they should have made an out of time application to amend their LOD, together with reasons explaining why the Tribunal should exercise its discretion for them to be admitted applying the ‘Martland’ criteria. However, I agree with Mr Abernethy that an application, such as the Cross-Application, is sufficient for this purpose and note that there was no application to amend a LOD in Clark Hill, Atlantic Electronics or General Motors.

It is accepted that the Disputed Documents are relevant. Indeed at one point in his submissions Mr McNall referred to them as being “obviously” relevant. As such, they are not only admissible but there is a presumption that, as relevant evidence, they should be admitted “unless there is a compelling reason to the contrary” (see Mobile Export at [20] and Atlantic Electronics at [31]).

Mr McNall accepts that is the case but contends that there are compelling reasons why the documents should not be admitted, including in particular that:

Essentially all the compelling reasons advanced by Mr McNall concern the fairness of proceedings. Something recognised by HMRC in their guidance ARTG8395 – First-tier and Upper Tribunals: preparing for the tribunal: preparation of statement of case which states:

“The purpose of the statement of case is also to tell the customer what HMRC’s case is. So it needs to be comprehensive as the customer will rely on it to prepare their case for the tribunal, including the list of documents. If it is not, HMRC may be depriving the customer of a fair opportunity to assemble evidence in support of their appeal.”

In addition, Mr McNall refers to HMRC’s conduct in relation to these proceedings, which he contends, particularly in the light of HMRC’s own guidance, is unfair. This is, he says, especially the case in relation to Exhibits MT4, MT5, MT6, MT7, JR1, JR5 and JR6 which were not mentioned in HMRC’s statement of case. Mr McNall also contends that there are issues regarding the availability of Exhibits JR5 and JR6 at the time HMRC provided the LOD given the apparent reference to them being exhibited to the witness statements of EA Officer Jacqueline Berry whose witness statement was included as ‘Document 7’ in HMRC’s LOD. Clearly this would be a matter for cross examination at the substantive hearing and, were HMRC found to have acted unreasonably in relation to these exhibits, could result in a possible application for costs by Burton.

However, having carefully considered all of the circumstances of the case; the submissions of the parties; and taken into account the overriding objective, I consider that, provided Burton is given an opportunity to respond to them, HMRC should be permitted to adduce and rely on the Disputed Documents. If not, as Judge Greenbank observed in Clark Hill, it “would risk the Tribunal reaching a decision on incorrect facts”.

In reaching that conclusion I have taken into account that it is accepted that the Disputed Documents are relevant; that the proceedings are at a relatively early stage and no hearing has been listed; and the fact that, as mentioned above (at paragraph 14), directions have been issued staying the proceedings to enable the parties to provide the Tribunal with their agreed proposed case management directions (or, in the absence of agreement, their own proposals) for the further progression of the case which should include provision for Burton to respond to the Disputed Documents.