[2025] UKUT 201 (AAC)

Even if the appellant could be characterised as having chosen not to provide additional information, it was nonetheless an error of law for the First-tier Tribunal not to seek and await further information. First, the tribunal considered that it needed further information. Second, crucially, it was clear to the First-tier Tribunal that to seek and wait for it would not be futile. The accountants had already told the tribunal that “The imposition of a penalty may result in the inability for our client's business to continue and force the company into liquidation” and that they “can provide” “strict proof” of the appellant’s inability to continue trading if the penalty is imposed “as the company has a large deficit in their profit and loss account”. This told the tribunal that the appellant did have evidence to that effect and was willing to provide it if needed.

Moreover, this First-tier Tribunal decision was made on the papers. To pause consideration of the papers to wait for further evidence would not have disrupted an oral hearing list or wasted a slot in that list, or put either party to wasted costs. So it would not have been an “adjournment” in that practical sense. It would have been of minimal trouble to the tribunal to seek and await that further evidence, it seems to me. To do so would not have been disproportionate, contrary to what the First-tier Tribunal found. That is especially so given the amount of the penalty. The company was said to be in a “large deficit in their profit and loss account”. Any amount was “large” in that context. But £24,000 was especially so. It could not, as Mr Chima pointed out to me at the permission hearing, be calculated as a proportion of the profit because there was no profit; there was a loss. And that was already in evidence to the First-tier Tribunal – “large deficit” – without its seeing the actual figures.

The failure to seek and wait for the further evidence was material. It would on what was before the First-tier Tribunal have shown that the appellant could not afford to pay the penalty, at the least.

The parties agreed to remittal to the First-tier Tribunal. I consider that to be the appropriate course.