UT (Tax & Chancery) UT/2022/000155 - [2025] UKUT 00003 (TCC)

This appeal concerns the construction of Rule 11 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”) on the appointment of representatives. The appeal is against a costs decision (which followed a summary decision released on 11 August 2020) of the First-tier Tribunal (“FTT” or “the Tribunal”) TC/2016/01517 dated 29 April 2021 (“the Decision”). At the conclusion of the Decision, the FTT ordered that Bridgecom International Limited (“the Appellant”) should pay the costs of His Majesty’s Revenue and Customs (“HMRC” or “the Respondents”) in respect of the Appellant’s appeal which had been struck out on 15 May 2019. The order was made pursuant to Rule 10(1)(c).

The appeal is made on the basis that the FTT erred in law in making the costs order against the Appellant. In short, the Appellant argues that at the time that notice was given by the FTT to the representative of the allocation of the Appellant’s appeal to the Complex category, the appointment of the representative had not been validly notified to the FTT so, as a consequence, the FTT could not serve the notice on the representative. Thus, the FTT costs shifting jurisdiction under Rule 10(1)(c) did not apply.

The Appellant submits that Rule 11(2) requires a party to proceedings before the FTT, when appointing a non-legal representative, personally to send or deliver to the FTT the written notice of the representative’s name and address. It argues that in this case the notice was sent by the Appellant’s representative rather than by the Appellant, the party, such that the notice appointing the representative was defective or invalid. Therefore, when the Tribunal notified the Appellant’s representative, rather than the Appellant as party and taxpayer, that the case had been allocated to the complex category and that it had 28 days to opt out of the costs shifting regime (make a request to be excluded from potential liability to costs pursuant to Rule 10(1)(c)(ii)), the Tribunal had failed to give the required notice. Therefore, there was no jurisdiction for HMRC to apply for their costs nor power for the FTT to award them.

The Appellant accepts that this was not an argument that was made in the proceedings before the FTT, and the issue is not addressed in the Decision, but nonetheless the FTT granted it permission to appeal on this ground on 6 April 2022.

In short, HMRC submit that the appeal should be dismissed for a number of alternative reasons: (i) that even though the Appellant did not itself send to the FTT the notice that its non-legal representative was appointed to act, nonetheless the Appellant caused written notice of the appointment of its representative to be sent or delivered to the Tribunal and this was sufficient to comply with Rule 11(2); or (ii) Rule 11(2) should be interpreted purposively so as to require only that a party is required to give notice in writing of the appointment of a non-legal representative and their name and address rather than requiring the party to send or deliver such notice; or (iii) Rule 7 would and should permit the FTT to have waived any breach of the procedural rules or requirement on the facts of this case; and (iv) the FTT retains a jurisdiction to award costs by virtue of Rule 10(1)(c) even where no notice has been received by the parties or representatives of the allocation of a case to the complex category such that the Appellant’s failure to request to opt out of the costs regime 28 days after the allocation decision was received enabled the Tribunal to award costs against it.

We are grateful to the representative of the Appellant, Assistant Professor Zarkov, and counsel for HMRC, Mr Way, for the quality of their written and oral submissions which we address below.

For the reasons set out below, we agree with (i), (ii) and (iii) of HMRC’s submissions in the alternative and dismiss the Appellant’s appeal. There was no material error of law in the FTT’s Decision.