Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT/2023/000096 - [2024] UKUT 00203 (TCC)

Fecha: 02-May-2024

Grounds of appeal and Respondents’ notice

Grounds of appeal and Respondents’ notice

31.

In their Notice of Appeal from the FTT, the Appellants identified four grounds of appeal:

(1)

Ground 1 – The Revised Decision is inadequately reasoned, failing to provide a clear explanation for why the FTT rejected the arguments that the Appellants had a bona fide belief that they were entitled to make the claims for loss relief because they were told the arrangements were backed by counsel and also because it was never suggested by Montpelier or BR that the making of the claims was inappropriate.

(2)

Ground 2 – The changes that were made to the Original Decision in the Revised Decision are too extensive and significant to be justified under the slip rule in Rule 37 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the “FTT Rules”) and are of a nature that should not be made under the review power in Rule 41 of the FTT Rules.

(3)

Ground 3 – The FTT used flawed objective reasoning when deciding that the conduct of the Appellants was deliberate.

(4)

Ground 4 – The basis on which the FTT found that the Appellants were guilty of deliberate conduct discloses an error of law and aspects of the reasoning appear unreasonable and suggest that there has been a failure to pay proper regard to material considerations.

32.

The Appellants submitted that for the reasons relied upon in their grounds, the decision of the FTT should be quashed and remitted to a new Tribunal for redetermination.

33.

In their Respondents’ Notice, HMRC submitted that the Revised Decision is properly reasoned, and should not be quashed.

34.

HMRC also submitted that Ground 2 appeared to be a new ground of appeal, acknowledging that this ground could not have been included in the PTA Application but stating that the Appellants should apply for permission to amend their grounds of appeal. The Appellants made such an application on 5 December 2023. All parties made written submissions on that application in their written submissions ahead of the substantive hearing before us. We did not request further oral submissions at the hearing and informed the parties that we gave permission for the Appellants to rely on Ground 2.

35.

We received detailed written submissions from counsel for all parties. We received further written submissions after the hearing. We are grateful to counsel for their helpful submissions, both in writing and orally, although we have not found it necessary to refer to each point that they raised.

36.

We address Ground 2 first (as the Appellants submit that the changes to which they refer should not be taken into account when deciding whether to allow the appeal). We then address Ground 3 as that concerns the application of the test of whether the loss of tax arose as a result of a deliberate inaccuracy in the Appellants’ tax returns and logically should be considered before considering submissions as to the adequacy of reasons given for that decision.