[2024] UKUT 222 (AAC)

On 16 January 2023, a First-tier Tribunal (the “tribunal”) heard ZA’s appeal. ZA decided not to take part in the appeal. She asked for it to be decided in her absence. Ms Parry attended the tribunal hearing as Presenting Officer for Barnet.

The tribunal refused ZA’s appeal, stating it confirmed Barnet’s decision dated 17 February 2022. The tribunal decided ZA should be treated as having capital in excess of the prescribed limit of £16,000 with effect from 22 March 2021.

The tribunal decided ZA and JA were associated with CG, BV and WE. It listed the shareholding in these companies, together with the shareholder funds available for 30 April 2021 (CG - £318,051.00), 31 July 2020 (BV - £38,806.00) and 31 January 2021 (WE - £84,508.00).

The tribunal’s decision notice stated that ZA argued the three companies’ capital should be disregarded under regulation 49(5) and (6) of the 2006 regulations while she was undertaking activities in the course of the company’s business. The tribunal agreed with Barnet that regulation 49(5) is discretionary and regulation 49(6) only applies if the discretion under regulation 49(5) has already been exercised. The tribunal stated that Barnet had decided not to exercise its discretion under regulation 49(5) because there was capital in excess of £16,000.

The tribunal issued a Statement of Reasons for its decision on 03 April 2023.

On 22 September 2023, Upper Tribunal Judge Ovey gave ZA permission to appeal against the tribunal’s decision, on the basis it was arguable, with realistic prospects of success, that assuming regulation 49(5) is a discretionary provision, the tribunal had made an error of law in one or more of the following ways:

Judge Ovey did not limit her grant of permission to appeal. She made detailed directions for the parties to respond on specific issues.