TC09682 - [2025] UKFTT 01334 (TC)

In determining the Appellant’s application that these proceedings are stayed pending the outcome of the FIR, I have considered the documentation before me which sets out that the government has scheduled to consider this review once concluded and publish a response by the Autumn Budget which will be delivered on 26 November 2025.

The FIR is confined to the scope of the Loan Charge legislation, specifically addressing disguised remuneration schemes used between 9 December 2010 and 5 April 2019. It will cover both the Loan Charge itself and any related outstanding tax liabilities arising from the income involved, and aims to resolve outstanding issues related to the Loan Charge by focusing on bringing closure to those affected, ensuring fairness across the taxpayer population, and making sure appropriate support is available for individuals subject to the charge. The review will explore why some individuals have not yet settled their tax liabilities with HMRC, seeking to identify the obstacles they face and propose practical ways to help them reach resolution, and considering how best to encourage unresolved cases to settle.

HMRC’s policy paper dated 4 June 2025 states:

“HMRC won't be able to tell customers exactly how they may be affected until both:

the review is complete, and the findings are published

the government issues its response to any review recommendations

HMRC will then write to customers again to update them on next steps.”

I have considered that the burden in making out the grounds for a stay is upon the Appellant and there is an inherent interest in the case proceeding (see GAP Group Limited v HMRC [2022] UKFTT 397 (TC) at [52]).

HMRC submits that the FIR is limited in scope to disguised remuneration schemes within the Loan Charge legislation, specifically between 9 December 2010 and 5 April 2019 and that HMRC does not intend to rely on the loan charge provisions in this appeal, which concerns property income and deductions. They argue that the Appellant has not demonstrated how the FIR would materially affect the legal issues in this case or that the FIR is relevant to the proceedings, and speculative settlement possibilities do not justify a stay, as any delay would be contrary to the Tribunal’s overriding objective, which includes avoiding unnecessary delay and ensuring efficient use of Tribunal resources.

The Appellant argues that the FIR may present new settlement opportunities, and that proceeding with litigation now would risk unnecessary costs, undermining the Tribunal’s overriding objective, which includes dealing with the case in ways which are proportionate to the anticipated costs and the resources of the parties. They refer to evidence from a freedom of information request published by the All-Party Parliamentary Loan Charge & Taxpayer Fairness Group, which suggests HMRC offered highly favourable settlement terms to corporate bodies while adopting a harsh and punitive approach toward contractors and argue that HMRC has misunderstood the relevance of the FIR, which is not about altering the legal analysis for the substantive appeal but about potentially eliminating the need for a hearing altogether by creating new settlement opportunities. The Appellant contends that pressing ahead with litigation before the FIR concludes undermines its purpose, as the review is expected to recommend settlement terms for self-employed taxpayers that align with those offered to other entities, focusing on the scheme user rather than the taxpayer’s classification.

The Appellant also refers to the Tribunal’s Practice Statement on Alternative Dispute Resolution which encourages parties to consider settlement opportunities, and argues that the FIR directly aligns with that objective. They submit that the proposed delay is short and proportionate, would not prejudice HMRC’s ability to present evidence, and may avoid unnecessary litigation altogether.

Having considered the detailed submissions made by both parties, I agree with HMRC that the inherent uncertainty arising from the review does not assist the Appellant where the burden is upon them to make out the need for a stay. However, I must also consider the potential for settlement opportunities where HMRC’s stated position is that they are unable to say whether the Appellant will be affected by the FIR until both the review’s findings are published and the government issues its response to any review recommendations.

The Tribunal must respect the need for litigation to be conducted proportionately and should consider the overriding objective and strike a balance of fairness between both parties. On balance, I consider the potential prejudice to HMRC from what is now a relatively short delay to be outweighed by the potential prejudice to the Appellant should the application be refused. I am satisfied that the FIR may materially affect the resolution of this appeal. Given the relatively short timeframe until the government’s response is expected, the Tribunal’s duty to facilitate ADR where appropriate, and the potential for reducing costs, I consider it proportionate and just to grant a stay in these circumstances.