TC09655 - [2025] UKFTT 01206 (TC)

No good or sufficient reasons have been provided by the appellant to justify reinstatement. The reason appears to be that Mr Borthwick panicked following advice by initially a paralegal and subsequently by counsel, that because of ongoing litigation which HMRC might pursue if they were unsuccessful, there would be a financial and reputational detriment on the sale of his business.

Even if this is to be believed, the major flaw in it is that there is nothing wrong with this advice. There has always been a risk of ongoing litigation if the appellant was successful. Mr Borthwick knew from 2022 when he made the appeal of the risks of winning and losing that appeal. He accepted that he knew that if he succeeded, HMRC had the right of appealing.

His decision to withdraw following advice that HMRC might continue to litigate if they were unsuccessful was a rational decision based on accurate legal advice.

And his situation has not changed. If the appeal is reinstated, he still runs the risk of ongoing litigation by HMRC if the company is successful. He has provided no satisfactory explanation as to why this risk is any less now than it was when he withdrew his appeal.

It is far more likely that the real reason why he withdrew was because he realised on the Monday evening that LP had not come up to proof and he had not been given the 60:40 chance of success which he suggests now had been given by counsel. Discussions with counsel were not limited to the ongoing litigation point but were about the prospects of success in the appeal, generally, and the real reason why the appellant withdrew was because LP’s evidence did not go well.