TC09641 - [2025] UKFTT 01115 (TC)

Lindsay Hackett v HMRC [2016] UKFTT 781 (TC) (“Hackett”) is a previous decision by this Tribunal on an appeal against a PLN by a company director in circumstances where, as here, there had been a previous Tribunal decision on an appeal by the company on the matter giving rise to the penalty.

Mr Hackett was the sole director of a company called Intekx Ltd (“Intekx”). HMRC denied Intekx repayment of input VAT on the basis that Intekx’s transactions were connected to fraudulent evasion of VAT and Intekx knew, or should have known, that this was the case. Intekx made separate appeals to the Tribunal in respect of the input tax denials for different VAT periods. In the first such appeal, for the VAT period 09/06, the Tribunal held that Intekx knew its deals were connected with fraud, and so dismissed the appeal (see Intekx Ltd v HMRC [2014] UKFTT 277 (TC)).

HMRC subsequently issued Intekx with an inaccuracy penalty, and at the same time sent Mr Hackett a PLN specifying the whole of the penalty as the amount payable by Mr Hackett, on the basis that the deliberate inaccuracy was attributable to him as an officer of the company. Mr Hackett appealed against the PLN, and one of the issues considered by the Tribunal was whether it would be an abuse of process for Mr Hackett to seek to re-litigate issues that had already been settled in the previous appeal by Intekx.

The Tribunal found, at [40], that the fact that the penalty appeal was by Mr Hackett and the previous appeal was by a different party (Intekx, the company of which Mr Hackett was the sole director) did not prevent the principle of abuse from applying. The Tribunal stated:

“[40] …The correct approach was that formulated by Sir Robert Megarry V-C in Gleeson v J Wippell & Co Ltd [1977] 1 WLR 510 [“Gleeson”], at p 515, namely that “there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was a party should be binding in proceedings to which the other is a party”.

[41] There can be no doubt in this case that Mr Hackett has that sufficient degree of identification with Intekx to enable the principle to be applied in this case. Indeed, there was no serious argument to the contrary. Mr Hackett was the sole director of Intekx at the material time, and it was he who made decisions and gave instructions on its behalf.

[42] The question therefore is whether, in all the circumstances, it would be an abuse of process for Mr Hackett to argue in his own appeal against the personal liability notice, and as part of that against the penalty assessed on the company, matters which either were the subject of determination by the tribunal (in respect of the 09/06 period) or in relation to other periods could have been determined by the tribunal had the appeals in those respects not been withdrawn.

[43] So far as the 09/06 period is concerned, the relevant issues were the subject of a final determination by the tribunal in Intekx 2014, having considered on a hearing of the substantive appeal all the facts and evidence including the evidence of Mr Hackett. I have no doubt in that respect that it would be an abuse of process for Mr Hackett to seek to re-litigate the relevant issues determined by the tribunal in that appeal. Mr Hackett, in his capacity as director of Intekx, has had an opportunity to put forward his case that in that period there was no connection between the transactions of Intekx in that period and fraudulent evasion of VAT, and that Intekx did not know of any such connection. It would be contrary to the principle of finality of litigation to allow that determination to be re-visited on this appeal. It would be a clear abuse of process to do so, and there are no circumstances that could justify such a course.”

The Tribunal concluded on this point, at [46], that it would be an abuse of process for Mr Hackett to dispute, in that later case, facts and issues determined by the Tribunal in the earlier appeal by Intekx. This aspect of the Tribunal’s decision was not appealed when Hackett proceeded to the Upper Tribunal.

In Hackett, the circumstances were different for the other periods under appeal, because for those periods (unlike the 09/06 period) there had not been an earlier Tribunal determination. That is not the case in the present appeal by Mr Lambert, in which all the periods to which the PLN relates were considered in the Tribunal’s previous decision in Fulfillment Logistics.