Upper Tribunal Tax and Chancery Chamber

UT/2023/000018 - [2024] UKUT 00165 (TCC)

Fecha: 06-Feb-2024

hmrc’s grounds of appeal

hmrc’s grounds of appeal

24.

The FTT deferred consideration of HMRC’s initial application for permission to appeal until the handing down of the decision in Atholl House CA. HMRC’s application was then revised. The FTT granted permission to appeal on the following grounds:

(1)

The FTT erred in law in its interpretation and/or application of the third stage of the RMC test in that:

(a)

The Tribunal wrongly adopted the test of whether Mr Chiles was in business on his own account, instead of the correct analysis required at the third stage of the RMC test; and

(b)

The Tribunal did not put the relevant terms of the hypothetical contracts at the heart of its analysis at the third stage of the RMC test; alternatively, did not take those terms into account.

(2)

Further or alternatively, the FTT erred in law and/or took into account irrelevant considerations and/or failed to take into account relevant considerations in its approach to the question whether Mr Chiles was “in business on his own account” in relation to the relevant contractual engagements between BBL and each of ITV and the BBC in that:

(a)

The FTT erred in asking whether Mr Chiles was generally in business on his own account, rather than whether he was in business on his own account in relation to the terms of his specific hypothetical contracts with each of ITV and the BBC; and

(b)

The FTT wrongly disregarded or marginalised cogent factors, such as the length of the contracts, the level of required work commitment and the relationship of financial dependency thereby generated, in determining whether, in relation to the terms of the specific hypothetical contracts in question, Mr Chiles was in business on his own account.

25.

The procedural background to the grant of permission is important. The following summary is taken from the FTT’s decision granting permission. In Atholl House CA, the Court of Appeal stated (broadly) that it was only matters which were known or reasonably available to the parties which could be taken into account at the Third RMC Stage. Initially, BBL accepted that that there was an error of law in the Decision, namely a failure to take into account whether certain matters relevant to the Third RMC Stage were known or reasonably available to the BBC and ITV. BBL later changed its position, submitting that there was no such error of law because it had not been part of HMRC’s pleaded case that the relevant matters were not known or reasonably available to the BBC and ITV. It was part of HMRC’s argument in relation to Ground 1(b) and Ground 2(a) above that the FTT failed to take into account whether relevant matters were known or reasonably available to the BBC and ITV. HMRC had initially applied to amend their statement of case to include these arguments, but BBL had opposed that. In granting permission, the FTT stated as follows:

The Appellant has invited me to deal with the Respondent’s application to amend its Statement of Case. I do not consider it appropriate to do so for the following reasons:

(1)

The application was expressly made on the basis that the Respondents do not consider that any amendment to their Statement of Case is required in order to pursue the grounds in their application for permission to appeal.

(2)

It is properly a matter for the Upper Tribunal whether the Respondents should be permitted to argue, in support of their grounds of appeal, that the [FTT] failed to take into account whether relevant matters were known or reasonably available to ITV and/or the BBC.

26.

So, one of the issues we must determine in this appeal is whether HMRC should be allowed to pursue the argument as to actual or constructive knowledge. The fact that permission to appeal has been granted for a ground does not mean that it is necessarily appropriate for this Tribunal to permit it to be argued: see CF Booth Limited v HMRC [2022] UKUT 00217 (TCC), at [73]-[75], applying Mullarkey v Broad [2009] EWCA Civ 2.