TC09643 - [2025] UKFTT 01117 (TC)

We start with Women of Scotland which scopes the approach we are required to adopt. In particular it assists us in framing what we can and cannot use when seeking to interpret the relevant statutory provisions we have to construe.

In Women of Scotland the Supreme Court confirmed that the general approach to statutory interpretation is well established. It adopted and expanded on the approach taken by the Court in R(O) v Secretary of State for the Home Department [2022] UKSC 3 (R(O)). We summarise paragraphs 8 – 14 as establishing that we are seeking the meaning of the words which Parliament used in the particular context in which they are so used. The meaning of the words used must be interpreted so as to provide a “coherent, stable and workable outcome … that is constant and predictable” thereby enabling citizens to understand parliamentary enactments simply by reading them. Thus, the primary resource for interpretation is the words themselves. Some of the words will be interpreted by reference to their ordinary meaning as determined from the context of the provision as a whole, the group of provisions of which the specific provision is a part and the Act as a whole thereby requiring the same word used more than once to have the same meaning, (unless the context otherwise requires). Words which are statutorily defined will bear the defined meaning which is likely to apply wherever the words are used, again subject to context. Where the language adopted is unclear or ambiguous it may be appropriate to consider aids, external to the act itself, to determine the intention of Parliament in choosing the statutory language. Such aids as are specifically identified by the Court (albeit by reference to language indicating the list to be illustrative/non-exhaustive) appear to be limited to material with a parliamentary origin (commission reports, white papers, explanatory notes etc). The Court is clear that such external aids are secondary resources and likely to only be needed where the language used is unclear, ambiguous or results in an absurdity.

In the context of determining what external aids we might permissibly use we note that in R(O) the majority of the Court referenced materials produced by or for Parliament. In her concurring judgment Lady Arden indicated that recourse to other pre-legislative material can be appropriate and that the only substantive restriction on what may be useful is that it should be of an official nature. This more liberal approach was not adopted by the other members of the Court in R(O) and has not been referenced in For Scottish Women. We see there is a clear distinction between material of the type listed by the majority in R(O) and endorsed in For Scottish Women and “pre-legislative material” generally. In the context of a requirement that legislation should be capable of being interpreted by reading it, it is to be expected that the external aids should be limited to those resources that were prepared by or for Parliament concerning the mischief to which the legislation is addressed or by way of explanation of it.

Based on the above analysis we consider that we are limited to using the Explanatory Notes as external aids. Whilst the consultation, response and guidance are pre-legislative material they were not prepared for or by Parliament. Accordingly, we do not take them into account. As explained in For Scottish Women, if we consider the language used by Parliament to be clear, unambiguous, and not leading to an absurdity we will have no need to consider even the Explanatory Note.

If we decide we need to use the explanatory notes to resolve an issue of clarity or ambiguity, then, as confirmed in R (oao PACCAR Inc and others v Competition Appeal Tribunal and others [2023] UKSC 28, we need to recognise that the explanatory notes play a “secondary role … inform[ing] the assessment of the overall purpose of the legislation” (see paragraph 42). Further, as confirmed by the Court of Appeal in R (ono McConnell) v Registrar General for England and Wales [2020] EWCA Civ 559, if there is an inconsistency between the terms of the explanatory notes and the language adopted in the legislation the aids are incapable of altering the true interpretation of the statutory provision (see paragraph 37). Finally, the Court of Appeal has clearly stated in R (oao Kaitey) v Secretary of State for the Home Department [2021] EWCA Civ 1875 that, when undertaking the exercise of statutory interpretation, the courts (and tribunals) should “resist attempts to elevate the [aids] to a status where they supplant the language of the legislation itself. This is not least because, as the [explanatory notes] themselves state, they are prepared by the Government in order to assist the reader in understanding the Act but do not form part of the Act and have not been endorsed by Parliament”.

In Women of Scotland the Court is silent on the question of the role of headings. In Montila, to which we were referred by HMRC, the House of Lords stated that the heading to a provision provides part of the interpretive context. In Lipton v BA CityFlyer Ltd [2024] UKSC 24 the Supreme Court acknowledged the use of headings as an aid to interpretation but appeared to limit their use to a situation in which the language of the statute was ambiguous and aligned the use of headings with “external aids” to interpretation. At paragraph 231 the Court endorsed the warning provided by the editors of Craies on Legislation 12^th ed (2020) at paragraph 26.1.9 that cautions:

“treating headings as if they were part of the text of the Act. They point out that the authorities of both Houses do not regard them as part of the Bill before the House, and therefore permit their informal amendment more or less at the will of the drafter. They conclude :

‘It would therefore be quite wrong to regard a heading as part of the text that expresses the settled will and intention of Parliament.’

Similarly, the editors of Bennion, Bailey and Norbury on Statutory Interpretation para 16.7 state:

‘Where a heading differs from the material it described, this puts the court on inquiry, but it is most unlikely to be right to allow the plain meaning of the words to be overridden purely be reason of a heading’”.

In light of this clear statement we propose to treat the heading of the provisions we interpret as an external aid to which we are entitled to turn in the same circumstances in which we may use the explanatory notes to Finance (No. 2) Bill 2017 (FA17). In particular and in light of the cases referred to in paragraph 40 we should not, in our view, permit ourselves to seek to interpret a heading so as to facilitate an interpretation of the section for which it is the heading.