UT/2021/000192 - [2024] UKUT 00242 (TCC)

UBS’s claim maintains that HMRC’s assertion in its November 2022 decision that UBS would not have any obligation to assist HMRC with the enquiries in relation to Mr Wood and the 2005 gilt option agreement is incorrect. Our first observation is that it is not clear to us that the letter discloses the assertion advanced. Read in the round the point being made is that HMRC understood UBS’s position to be that if the 7A discretion were to be exercised UBS would then bow out but we do not read the letter as agreeing with that position. On the contrary, the point the letter goes on to make is that even if the 7A discretion were exercised UBS would still need to be involved because of UBS’s NICs liability. We do not therefore consider HMRC were making the assertion said to be a misdirection (and there is no suggestion it was doing so from Ms Harper’s witness statement). We note however that HMRC’s position at the permission hearing was to defend this point on the basis the assertion was made but that HMRC were right to be concerned about UBS’s lack of engagement if the 7A discretion were exercised. If we are wrong on this (i.e. there was an assertion by HMRC that they were concerned exercising the 7A discretion would mean UBS no longer being involved) or if the view is taken that despite withdrawal of their defence HMRC are to be held to what is effectively a concession on their part that the assertion was made), then we would agree with the Claimant that HMRC’s assertion would be incorrect and a misdirection. As UBS points out, if UBS had relevant information in relation to the liability issue, there would be a mechanism through Schedule 36 Finance Act 2008 to get UBS to provide that in Mr Wood’s closure notice proceedings if need be. It would not be a factor which pointed against exercising the 7A discretion.

To the extent we have found there to be misdirections of law it follows that those misdirections were also points that were reached which were irrational in Wednesbury terms i.e. they were points which no reasonable decision maker could have reached.