UT/2020/000377 - [2024] UKUT 00099 (TCC)

As a starting point, we have to express some difficulty in addressing the issues in Ground 2 given our lack of confidence in the approach which the FTT took to constructing the hypothetical contracts. We have, however, approached this ground of appeal on the assumption that, contrary to our conclusions on Ground 1, the FTT’s overall approach to the construction of the hypothetical contracts was sound. For the purposes of this ground of appeal, we have therefore focussed on the manner in which the FTT applied the test of mutuality of obligation at FTT [315] – [358].

As we have mentioned, HMRC raise two main challenges to the FTT’s approach to the question of mutuality of obligation. We will deal first with the question of whether the FTT applied the correct principles as established by the case law authorities.