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Conclusions
Conclusion
The Upper Tribunal consents to HMRC’s application to withdraw.
HMRC’s application to stay the proceedings on the basis the proceedings are academic is refused.
UBS’s claim against HMRC’s refusal to exercise the 7A discretion succeeds in the following respects:
HMRC misdirected themselves in regarding the lack of quantification of liability as a bar to considering the 7A discretion.
HMRC misdirected themselves in assuming the fact UBS remained liable for NICs detracted from UBS’s argument that exercising the 7A discretion would be more efficient.
UBS’s claim, that HMRC’s failure to exercise 7A in its favour was in the circumstances unlawful under Padfield / Wednesbury irrationality, is dismissed.
The remedy ordered is:
a declaration that the November 2022 decision was unlawful insofar as it made the misdirections of law in [98] above.
a mandatory order that HMRC, within two months of the release date of this decision, make a new decision on whether to exercise the 7A discretion which takes account of the misdirections of law identified above.
.
UPPER TRIBUNAL JUDGE SWAMI RAGHAVAN
UPPER TRIBUNAL JUDGE JEANETTE ZAMAN
Release date: 21 August 2024
- Heading
- Introduction
- Background
- Ground 1 – Breach of Padfield principle
- Ground 2 - Misdirections of law and Wednesbury irrationality
- Remedy sought
- Parties’ submissions in summary
- Issues
- Misdirection that exercise of 7A premature because quantum of liability not established
- Misdirection and/or irrelevant consideration as to interaction between NICS and 7A
- Mistaken premise that UBS would not and/or could not be compelled to provide information relating to HMRC’s enquiries
- Does the combination of above factors mean that HMRC are bound to exercise the 7A discretion?
- Conclusions