TC09655 - [2025] UKFTT 01206 (TC)

When exercising our discretion under Rule 2, an important consideration is the reason why the appellant withdrew its appeal.

It is clear from the evidence that Mr Borthwick made an irrational decision. He was unaware until the Monday evening that if HMRC were unsuccessful, it was likely that they would continue litigating until they were successful. This would take time and money and would have a detrimental impact not just on his mental health but also on the ability to sell the business. He panicked. He came back to the tribunal on the Tuesday and directed counsel to withdraw. In the cold light of day, having consulted Dr Willets he reconsidered, and instructed her to make an application to reinstate.

Rule 17 is designed to give an appellant who has withdrawn, an opportunity to reinstate. It is designed to allow an appellant who has made a mistake (as Mr Borthwick has done in this case) an opportunity to correct that mistake. Humans make mistakes.

The reason why Mr Borthwick directed counsel to withdraw was not because he had been advised that his expert had not come up to proof, nor that he had a weak case. It was because he had been advised that HMRC might continue litigating should they be unsuccessful. Even if this was not an irrational decision, it was certainly a rash one.

In light of all these considerations, the balance of prejudice weighs heavily in allowing the application. It is fair and just, and in the interests of justice, that the appellant be given the opportunity to reinstate his appeal and have a full hearing of the issues.